Grant Thornton - Transfer Pricing Specialists

At Grant Thornton, we understand that transfer pricing is the number one international tax area of concern to multinationals. Although the principles are common, interpretations differ from one tax authority to another and we are now starting to see a greater emphasis on examination and audit activity to encourage compliance. With ever-more fiscal authorities now also focusing on further developing their transfer pricing rules, ignoring the issue is not an option for any well-run business.

What is transfer pricing and who is affected?

Transfer pricing is the pricing of goods and services within a multinational organisation. The term usually refers to prices on cross-border transactions between entities, eg from a parent company to a foreign subsidiary. Since prices are controlled within the organisation, a price that appears to reflect market pricing may not be viewed as an "arm's length" price by a tax authority.

Tax authorities review transfer pricing in order to tackle profit shifts detrimental to the tax revenue of their country. Grant Thornton transfer pricing specialists are experts at helping clients navigate through the maze.

Understanding multinational tax challenges

Growing international businesses need to examine their related party transactions to ensure that they comply with the transfer pricing laws of each country in which they operate. Compliance with the differing requirements of multiple tax jurisdictions is a complicated and time consuming task, hence organisations seek local advice from experts such as Grant Thornton to make certain that they satisfy local rules and avoid double taxation (being taxed twice on the same profit).

Tax authorities in each country strive to ensure that transfer prices have not been set (or profits manipulated) to avoid tax. Almost without exception, they are imposing stricter penalties, new documentation requirements, an increase in information exchange and increasing their audit and inspection activity.

Facing complex issues

Grant Thornton transfer pricing specialists understand that businesses will have to face a number of complex issues which could include:

  • Managing worldwide transfer pricing policies and procedures efficiently
  • Documentation requirements in multiple jurisdictions
  • Tax authority transfer pricing audits or enquiries
  • Gaining certainty via rulings or Advanced Pricing Agreements (APA)
  • Taking a more strategic view of the business, for example, centralising services and supply chain management

How transfer pricing specialists can help you address your business needs

As leading tax advisers, Grant Thornton member firms understand the need to comply with transfer pricing legislation in a way that is both cost effective and efficient. Grant Thornton transfer pricing specialists provide comprehensive solutions tailored to your needs, taking business objectives and the exact nature of the transactions into consideration, to deliver the best service to you.

The transfer pricing process

Grant Thornton member firms understand that the transfer pricing process may vary in each country in which you do business. Grant Thornton transfer pricing specialists can devise and document a clear transfer pricing strategy for your organisation. We tailor our approach to your needs and the process may include:

  • A fact-finding exercise - analysis of the functions performed and risks assumed by each entity
  • Selection of the appropriate transfer pricing method and identification of the tested parties
  • Benchmarking analysis - comparable companies are identified using both global and local databases, and an economic analysis is conducted
  • Documentation - results are collated into a report and the required documentation is prepared
  • Assistance with related party disclosures
  • Dispute resolution - assisting your company in defending your transfer pricing policies before the tax authorities
  • International compliance assessment to meet standards in other jurisdictions
  • Transfer pricing risk assessment
  • Transfer pricing planning

Grant Thornton provides assurance, tax and advisory services

Grant Thornton International is one of the world's leading international organisations of independently owned and managed accounting and consulting firms. Clients of member firms can access the knowledge and experience of more than 2500 partners in over 100 countries and consistently receive a distinctive, high quality and personalised service wherever they choose to do business.

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