Transfer pricing analyses are not only a mandatory but also the most significant element of TP documentation. Notably, a multi-million upward adjustment is a threat not only in the absence of transfer pricing analyses, but also when the analyses held by the taxpayer are of low quality and do not fulfil their purpose, i.e. fail to justify the market nature of the transactions performed.
Therefore, it is crucial to prepare high quality transfer pricing analyses, as only such analyses provide adequate security in the event of a dispute with the tax authorities.