Transfer Pricing Audit

Transfer pricing audit

A transfer pricing audit consists of a detailed analysis and verification of the prices used in transactions between entities, such as the sale of goods, and the provision of services or loans, among others, to ensure compliance with market principles. In the face of increasingly complex tax rules, a transfer pricing audit helps to properly establish market prices, ensuring that the agreed terms and conditions align with those agreed between independent parties.

A transfer pricing audit provides:

Risk identification

This process enables us to thoroughly understand potential areas of non-compliance which may lead to future tax adjustments or contentious issues with the tax authorities. By conducting precise analysis and identification of transfer pricing risks, we can counteract and apply appropriate remedies in advance, safeguarding the taxpayer's interest in precise tax settlements.

Compliance

The transfer pricing audit serves to verify that transactions carried out between related parties comply with local and international tax regulations. We verify that the transfer pricing documentation and the valuation methods used meet the legal requirements, which is key to avoiding criminal tax consequences.

Market test

The analysis includes an assessment of whether the determined transfer prices between related parties correspond to the conditions established in transactions between independent parties in the market. This examination is crucial to avoid practices such as unjustified profit shifting or minimising the tax burden. Price marketability is not only a requirement of legal tax regulations, but also a factor that fosters fair competition.

Scope of a transfer pricing audit

The scope of a transfer pricing audit is diverse and depends on the specifics of the entity and the legal requirements. It encompasses verification of documentation obligations, assessment of the methodology of determining transaction prices, analysis of transfer pricing documentation, verification of price compliance with the market principle, and assessment of agreements and tax strategies. The audit also includes support in tax disputes and advice on tax optimisation. The scope of the audit is adapted to your needs on a case-by-case basis, but most often includes:

Identification of transactions

Identifying which transactions require documentation.

Examination of documentation

Verify the accuracy of transfer pricing documentation.

Recommendations:

Offering suggestions for actions to optimise market-based transfer pricing activities.

Benefits of a transfer pricing audit

A transfer pricing audit ensures the compliance of your activities with the applicable regulations, which is a valuable value in the face of a dynamically changing regulatory environment. This helps your company avoid not only high sanctions, but also potential disputes with the tax authorities.

A transfer pricing audit ensures identification of tax optimisation opportunities, contributing to better cost management and increased competitiveness in the market. Sound documentation and a well-considered transfer pricing strategy engender trust and your business credibility, which is invaluable in the eyes of business partners, investors and the tax authorities.

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Transfer Pricing Audit