Global Core Documentation

Through transfer pricing planning we help you identify opportunities for a more-advantageous profit-allocation structure, taking into consideration the existing tax profile of group entities and the operational environment of the group. The documentation is prepared for all types of inter-company transactions in compliance with local regulations and contains a complete transfer pricing analysis, including:

• Industry analysis
  An examination of the market in which the relevant commercial relations are located (including factors such as industry structure, market share and trends, substitute goods, etc.). The purpose of this analysis is to identify the industry sources of competitive advantages, key processes and value-drivers, key risks and influences on pricing.
• Company analysis
  Identifies specific value-adding activities or sources of competitive advantage within the business in accordance with the management model, business strategy and responsibility structure.
• Functional analysis
  Identifies the role of each participant in a related-party transaction, i.e. functions performed, risks borne and resources used (including intangible assets). The relative compensation earned by each participant should generally correspond to its proportional contribution.
• Economic analysis (method selection and benchmarking)
  The economic analysis first determines the actual legal and managerial profile of an undertaking. This background then enables the most appropriate transfer pricing method to be selected and the search criteria to be defined for identifying comparable transactions (benchmarking), which provide the basis for assessing the arm's length price of the relevant transaction. In most countries, the range of arm's length prices is considered to lie between the lower and upper quartiles of prices charged between unrelated parties.
• Financial analysis
  This applies the results of the economic analysis to the inter-company transactions being tested, in order to compare the prices applied between related business entities with the range of arm's length prices, using financial indices. A price adjustment will have to be made if the analysis identifies a significant difference between the company's price margins and those of comparable companies.

We can also provide advice regarding transfer pricing documentation prepared by the client, in order to ensure compliance with local requirements and consistent disclosure of information and supply of information on developments in local and foreign regulations, and other issues.