TRANSFER PRICING DOCUMENT
Transfer pricing offers numerous tax and financial benefits for organizations. You can count on us. Let our expert team help you navigate them effectively.
Benefits of Transfer Pricing Documentation
Transfer pricing documentation ensures that the important records stored by taxpayers represent the transactions between the companies. Preparation and maintenance of the transfer pricing document is important to make the taxation process more efficient and reliable.
Companies also get the benefit of preventing future transfer pricing issues with the presence of proper transfer pricing documentation. Furthermore, by maintaining important documents, you are ensuring your company does not run into any legal issues as all required legal and official documents are kept for future records.
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What Your Transfer Pricing Documentation Needs To Include
Outline and Structure Details
It is important to include the outline and structure details of an organization in the transfer pricing document.
Similarly, details about critical financial key figures and legal ownership are also added.
Essential information about the current market trends, competitors’ research, and key factors of the business actions are added in the Industry Analysis part of the transfer pricing document.
Intercompany Transactions Overview
This section includes the compilation of transactions between related parties and the relevant pricing policies.
This process is to establish the fact that the transaction is performed in line with the arm’s length principle.
Functional analysis deals with the functions, assets and risk assumed by all the parties involved in the related party transactions.
Transfer Pricing Method
The taxpayers must select the methods that provide the best estimation of an arm’s length price. Taxpayers can choose from the traditional transaction methods or the transactional profit methods.
This part of the transfer pricing documentation is important as it provides evidence that the methodology was carried out appropriately and that the related party transaction is carried out at arm’s length.
All strategies and analysis carried out should be included in the documentation.
If these processes seem overwhelming to you, give us a call and our expert team will be pleased to assist you with transfer pricing documentation.