Almost 100 countries worldwide have established rules related to transfer pricing with most requiring some form of documentation for intercompany charges. As offshore oil and gas companies tend to have a significant number of related party transactions, industry participants are on the radar in many countries.
This publication discusses the implication of multiple entities within the same enterprise—from employment companies to regional headquarters to equipment leasing organizations—coming together to successfully deliver a project. While the customer may recognize these various parties as one enterprise, local tax authorities see each company as its own distinct organization. Efficiently structuring and pricing transactions between related parties, or transfer pricing, is a critical success factor in managing enterprise risk and enhancing the bottom line.