What are financial transactions in the context of transfer pricing? Financial transactions encompass a wide range of intercompany activities, including loans, credit facilities, financial guarantees, bond issues, and other financial instruments. These are among the most common categories of related party transactions. To minimize the risk of income adjustments by tax authorities, the terms of…
For years, financial, service, and distribution or production transactions have consistently been the most commonly reported in the TPR form. This is largely because they are easy to identify as subject to transfer pricing regulations. However, in a complex and rapidly evolving business environment, companies often engage in transactions that do not fit neatly into…
Intangible services have long been a focus of tax authorities. It is therefore essential to understand the key risk areas associated with these service costs and to manage them proactively throughout the year—not just when preparing transfer pricing documentation. Confirmation of service performance (Benefit Test) When it comes to intangible services, taxpayers must be able…
Transactions with related parties can pose significant tax risks. Many taxpayers only identify transfer pricing (TP) issues when preparing documentation and submitting the Transfer Pricing Report (TPR), at which point their ability to implement necessary corrections is limited. A financial audit presents an excellent opportunity to proactively identify risks related to intra-group transactions. As part…
The deadline for submitting the CbC-P notification for 2024 to the Head of the National Revenue Administration (KAS) is fast approaching—31 March 2025 (for entities whose financial year aligns with the calendar year). This obligation applies to entities that are part of corporate groups required to submit a Country-by-Country Report (CbC-R). What is CbC-P reporting?…
The new Notice of the Minister of Finance on the announcement of the type of base interest rate and margin for transfer pricing (safe harbor for financial transactions) has been published! Conditions for safe harbor in financial transactions The Finance Minister has updated the conditions authorizing the use of safe harbor simplification for financial transactions.…
Discover how to create a step-by-step transfer pricing policy designed to minimize and compliance and tax risks for your business. What is a transfer pricing policy? A transfer pricing policy outlines the rules for determining prices in transactions between related parties, ensuring they meet the arm’s length standard. This policy is essential for companies operating…
Cash pooling is a widely used solution among capital groups. It streamlines the management of funds across multiple entities and enhances liquidity control. This approach leads to cost savings and more efficient financial management within the group. Cash pool arrangement – what is it? Cash pooling is a liquidity management system designed for companies within…
As the year draws to a close, companies are preparing their final accounts for 2024. Now is the last opportunity to carefully review and make any necessary adjustments to settlements, pricing, or contract terms. The adjustments themselves continue to raise numerous interpretative questions, not only about their definition but also regarding the conditions for their…
Transfer pricing is essential for both businesses and tax authorities, as it involves setting prices for transactions between related parties, where there may be a risk of under-reporting income in one of the jurisdictions. For this reason, it’s important to ensure these prices are correctly determined, and then properly verified. In this post, we outline…