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TPAD: Automation of the transfer pricing documentation process

TPAD

TPAD

KPMG Acor Tax introduces TPAD – a smart, dynamic and simple web-based transfer pricing tool that facilitates preparation of local transfer pricing files establishing a time efficient process reducing potential errors induced by manual handling of large data batches.

Background

Globally, transfer pricing documentation compliance requirements have increased with respect to format and timing of preparation. Groups often consist of numerous legal entities, resulting in a burdensome process for achieving full transfer pricing documentation compliance. If a Group consists of entities with a high degree of similarity with respect to functions, risks and assets, the documentation process can be improved and partly automated with the use of TPAD.

The thoughts behind TPAD and its function

TPAD is a dynamic tool used to populate Word documents based on Excel files (info requests) and Word templates. The info request only contains local entity specific information, whereas the Word template contains general information applicable to all the specific types of entities. By combing the Word template and the IRL’s, several local files can be created at once using TPAD establishing a time efficient process reducing potential errors induced by manual handling of large data batches.

The typical process when using TPAD:

  • Step 1: Prepare local file templates for each type of entity.
  • Step 2: Prepare info requests and forward to local entities.
  • Step 3: Review info requests and use TPAD to prepare local files

Advantages of TPAD:

  • Leverages from “economies of scale” to automate the population of information into multiple documentations on the basis of a standard template.
  • Simplification of cooperation between central TP and local organization for information gathering ensures a clear audit trail.
  • Intuitive interface allows for easy use by non-IT professionals.
  • Work with well-known formats (i.e. Word and Excel) – no coding experience required.
  • Possible applications beyond transfer pricing (I/C agreements, etc.)
  • Work with company-specific template/letterhead.

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