What is Local File documentation? Transfer pricing documentation is a legally required document focused on intra-group transactions. You must prepare the Local File documentation when engaging in controlled transactions with related entities. Typically, it is required when the value of such transactions exceeds the financial thresholds set by regulations within the tax year. The statutory…
The year 2024 has not introduced any major changes to transfer pricing regulations. However, related parties must still carefully comply with documentation and reporting obligations for intra-group transactions made in 2023. The process begins with identifying relationships as defined by transfer pricing regulations. The next step is determining whether the transactions qualify as controlled transactions…
Transfer Pricing: who has documentation and reporting obligations? If: you are a taxable person (subject to corporate income tax or personal income tax), and in 2023, you engaged in transactions with related parties, and the value of these transactions exceeded the statutory thresholds in 2023, then you need to determine your transfer pricing obligations…
Transfer Pricing: obligations await! The holidays are coming to an end, and as children head back to school, businesses must also turn their attention to fulfilling transfer pricing obligations for the 2023 tax year. Key deadlines are approaching for: Local transfer pricing documentation (Local File) Transfer pricing information (TPR) Group transfer pricing documentation (Master File)…
Transfer prices can impact the amount of income taxed in different countries. To ensure compliance, set these prices at the same level that unrelated parties would use in their transactions. Here’s how to do it. Various transfer pricing verification methods are used to assess the prices set between related parties. There are five basic methods,…
What is a benefit test? The benefit test is an analysis that confirms the following: the purchased intangible services have indeed been performed, the recipient derives benefits from the purchase that contribute to their income, the purchase of services is business rational. Who does it apply to? The benefit test applies to all group entities…
Authorities around the world are increasingly scrutinizing the nature of intra-group loans We observe that tax authorities and courts are more frequently recharacterizing loan transactions, challenging their substance and arm’s length nature. Authorities are now examining not only the market terms of the interest rate but also the underlying substance of the transaction. They are…
International groups often prepare global benchmarks, which are used by entities in different jurisdictions for local transfer pricing documentation. This approach ensures consistency in global transfer pricing policies and helps reduce the local costs associated with transfer pricing obligations. But is there a universal benchmarking that guarantees the defensibility of transaction arm’s length conditions in…
Increasing globalization is connected with not only threats but also with numerous opportunities. Multinational companies create innovations and know-how, which can be shared with other group entities or transferred to affiliates in other countries. During the transfer of intangible assets, it is crucial to analyze the pros and cons of the planned relocation. Remember that…
International groups often undergo business restructuring. If done between related parties, it must comply with the arm’s length principle. We understand that each restructuring can have its unique characteristics, which complicates the verification of its market nature. Additionally, restructuring under transfer pricing regulations may involve various, sometimes unexpected, transactions. What do the OECD guidelines say…