Businesses continue to grow and evolve in a complex, global and digital environment. The public are requiring greater transparency about your company’s tax affairs, while governments and tax administrations are increasing compliance requirements for transfer pricing. This makes your transfer pricing policy and framework a critical part of your compliance requirements. It is a key driver of your effective tax rate and can significantly impact your reputation.
KPMG is uniquely positioned to help your organisation manage these risks. We can put in place a transfer pricing framework which is representative of your company’s facts and circumstances. Our framework can identify the key value drivers of your business and we ensure that it is clearly articulated and can be defended in case of an audit.
Our transfer pricing solutions are sustainable and in line with international tax guidelines. We keep in mind the wider commercial objectives of the business in our approach, helping clients develop and articulate transfer pricing policies, perform benchmarking studies and documenting policies with the latest OECD Guidelines for both local and master files. We also provide value chain management analysis and, assist/ in dispute resolutions and capital management advice.
How you implement and manage transfer pricing policies is critical in paying appropriate taxes in the countries where you operate. Operational transfer pricing (OTP) is more than just a cost-plus calculation. Technology along with clearly understood, documented policies and processes are extremely important. KPMG simplifies your role so that you can focus on the results.
It is important to review your tax and overall business strategy regularly to ensure tax efficiency. The value chain management (VCM) operating model assists you in analysing and restructuring value chains. It also helps in understanding the tax implications of various decisions. KPMG’s services help limit tax leakage, align your tax strategy to the overall business strategy, mitigate risks and safeguard your reputation.
Under BEPS Action 13, a standardised approach to transfer pricing documentation was introduced and adopted across the world. It is sometimes tailored by specific countries. This can cause a significant burden when creating and maintaining compliant transfer pricing documentation on an annual basis. KPMG has invested heavily in this area over the past few years to create a fully managed solution. We also provide bespoke services to meet your BEPS Action 13 requirements.
Management of debt and cash within your group, or specific entity relating to transfer pricing, can be complex. Consideration of appropriate arm’s length quantum of debt, with affordability analysis is important. We can assess this fully, along with interest rates and interest deductibility, through corporate interest restriction (CIR). We also assist with documentation and applications to support related party debt position and advanced thin capitalisation agreement (ATCA).
Tax enquiries and disputes are timely, resource-intensive and can lead to higher taxation rates. They also often have a negative impact on your firm’s reputation. Our dispute resolution service team can help you manage transfer pricing enquiries when dealing with tax authorities. We have experience in high risk corporate programmes (HRCP), alternative dispute resolution (ADR), diverted profits tax (DPT) and profit diversion compliance facility (PDCF).