What is a benchmarking and compliance analysis?
A transfer pricing analysis, otherwise known as a comparative data study, is a concise outline of comparable information concerning companies operating in a similar area to the entity being analysed or information on analogous transactions carried out in the market by independent entities. According to the current legislation, there are two forms of transfer pricing analysis, i.e. comparative analysis – consisting in the analysis of data of unrelated entities or transactions concluded with or between unrelated entities deemed comparable to the conditions established in controlled transactions. In contrast, the second form of transfer pricing analysis is a congruence analysis, which demonstrates the consistency of the terms and conditions under which a controlled transaction was entered into with the terms and conditions that would have been set by unrelated parties.
Who must prepare a transfer pricing analysis?
In most cases, taxpayers obliged to produce local transfer pricing documentation must also perform detailed transfer pricing analyses for each individual transaction, which includes a benchmarking or compliance analysis. Excluded from this requirement are, among others, entities that are micro or small businesses, or entities that carry out non-controlled transactions with entities in so-called ‘tax havens’. The transfer pricing analysis is an essential tool, for both the taxpayer and the tax authorities, used to examine the marketability of transactions. Related parties must apply the ‘arm’s length’ principle in any controlled transaction, so preparing analyses is an essential element to mitigate tax risks in your business.
The OECD guidelines allow for two types of transfer pricing approaches in the area of transfer pricing:
Ex-ante analysis
Ex-post analysis
Relevance of transfer pricing analysis
With SWGK’s support, you will avoid tax risks and provide adequate protection for your company’s Management Board, which is personally liable for non-compliance. An interdisciplinary team, based on an elaborated methodology in line with Polish regulations and the OECD Guidelines, will prepare transfer pricing analyses, which you will use both in your dealings with the tax authorities and in your strategic planning.