The calculation and documentation of cross-border intercompany transfer prices is a huge challenge for multinational corporations.
Significant tax risks can arise if transfer prices are not at arm’s length or the respective documentation is insufficient. The consequences include corrections of transfer prices, tax adjustments and interest payments, as well as significant fines in some cases.
In the future, tax authorities will increasingly focus on potential profit transfers in the group for tax optimisation purposes using transfer prices (key term “base erosion and profit shifting – BEPS”).
”Compliance” with transfer pricing regulations and and the implementation of internal processes for transfer pricing are also coming to the fore for the management of international corporations, as well as for the tax authorities.
Our clients are international companies and groups from various industries and of various sizes: DAX and MDAX groups but also SMEs.
Each company has its own individual requirements and needs. That is why we work closely with our clients. The level of personal trust is of the utmost importance and is the basis of our advice.
Our transfer pricing experts at WTS are happy to support with the following issues relating to transfer pricing:
Our WTS experts help to create and implement group-wide transfer pricing documentation systems. This is done in compliance with the current statutory requirements and international standards. The new BEPS requirements make a three-tier documentation approach necessary: overall set-up in a master file (master documentation), local file (company-related documentation) and country-by-country reporting.
We help our clients to design and implement internal transfer pricing guidelines. We offer individual and efficient solutions for all company-specific particularities. That way a multionational corporation can raise awareness of the issue of transfer pricing across all levels of the company. At the same time this also makes it possible to identify and avoid any risks at an early stage. In the time of growing mobility of personnel and the ongoing digitalization of working processes this becomes more and more important.
In addition to preparing transfer price documentation reports and guidelines, we also support our clients in the overall planning and optimisation regarding all aspects of their global transfer pricing system. As a result of the BEPS developments it is clear that the calculation of transfer prices and the profit allocation within the group must match the added value contributed by each of the group’s companies. We offer many years of experience and comprehensive specialized expertise in various industries when it comes to performing the necessary economic analyses. We use leeway in terms of design to advise corporate and value chain structures that are optimal from a transfer pricing perspective. Our expertise lies in particular in establishing principal structures, centralising services and redesigning sales models and R&D structures.
We support our clients in defending transfer pricing within tax audits. Our experience shows that possible audit focus areas include cost allocations and profit margins for associated companies, umbrella brand licenses, finance transactions, as well as the adequacy of transfer pricing documentation reports in regard to the respective procedural provisions. In addition, our services for tax audits include statements justifying the appropriateness of transfer pricing, but also conducting redress procedures or helping with court proceedings. Through our global network of transfer pricing experts we can also clarify potential consequences for international group entities promptly and expertly and can initiate the necessary steps in good time.
In the course of a restructuring regarding the organisational or group structure, we support our clients with the analysis and optimisation of the restructuring form a transfer pricing perspective, as well as with the preparation of the necessary documentation. Even for cross-border business restructurings in the context of the regulations regarding the shift of functions and — related to this, and often necessary — the complex valuation of intangible assets, we offer comprehensive advice from our global network of transfer pricing experts.
Out-of-court measures to resolve disputes are becoming increasingly important when it comes to transfer pricing. We have comprehensive expertise in international mutual arbitration procedures (MAPs) and Advance Pricing Agreements (APAs). Here too our international network and the associated relationships of our international experts with the local tax authorities is a huge advantage for our clients.
Intangible assets are now frequently key value drivers for corporate success and therefore often have a high economic value. They are always the focus of tax audits around the world. It is therefore of vital significance for international companies to plan, implement and consistently document the global development of IP within a multinational group. This may take place, for example, as part of the internal research and development programmes or by analysing matters from a transfer pricing perspective. Besides, the valuation of IP is frequently the starting point for the determination ofg internal arm's length licence fees that apply to the use of IP within a multinational group of companies.
Do you have any questions about our services or WTS? Please let us know. Please fill in our short contact form. We will get in touch with you as soon as possible.