Transfer Pricing and Country By Country Reporting Services

Most of the multinational firms need to account for the unprecedented complexities, regarding international taxation and relevant regulations. The willingness of a parent company to allocate assets and liabilities uniformly, to handling rising volumes, has evolved into one such complexity that must be accounted for with Transfer Pricing.
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In most cases, transfer pricing needs to be handled with discretion, as the international enforcements have taken gigantic forms.
Most importantly, the global financial landscape has also metamorphosed, courtesy of the evolved BEPS standards, which now empower the government to keenly observe the issues related to tax avoidance.

Understanding Transfer Pricing

Transfer Pricing refers to the process of setting prices for transactions between associated entities within the same corporate group. This practice is most commonly employed in tax situations involving transactions between connected companies, often referred to as Controlled transactions. These transactions typically include the exchange of:
  • Physical goods
  • Intangible assets, or
  • Services among related companies

All pricing agreements between affiliated parties are governed by Transfer Pricing regulations.

In contrast, transactions between independent entities, where each operates independently of the other, adhere to a Transfer Price that mirrors the market-based Arm’s Length Price. In tax terminology, these are referred to as Uncontrolled transactions.

Purpose of Transfer Pricing

The rules of Transfer Pricing are crucial in various situations such as:
  • Within a single country, where internal corporate divisions need to determine the value contributed by different business units. This assessment is essential when one division renders services or transfers goods to another, requiring a clear determination of each division's profitability
  • In international contexts, Transfer Pricing is applied to transactions involving tangible goods, services, finances, or intellectual property between entities under common ownership and management

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Why Companies require Transfer Pricing Services?

Transfer pricing comes across as strategic risk mitigation and management tool for most businesses. Global objectives and operations often require a liability distribution, which eventually validates the importance of a transfer pricing plan. While every company has a specific intercompany pricing module, the evolution of stricter enforcement practices from the concerned authorities is now making organizations opt for third party services for getting the documentation right.

Companies that make use of credible and compliant transfer pricing techniques are better equipped when it comes to lowering shipping costs. With different segments of the same company exchanging services and products, transfer pricing helps reduce the tariff rates, even if they concern movement across international waters.

Easier said than done, to initiate transfer pricing in a holistic and rewarding manner, companies require efficient services, best used for preparing documents and disclosures. Moreover, with companies operating across diverse countries, country-to-country financial reporting is also an essential aspect that companies must concentrate on.

Who is subject to UAE Transfer Pricing Regulations?

As detailed in the Public Consultation Document, the forthcoming Corporate Tax Regime in the UAE incorporates Transfer Pricing rules to ensure that transaction prices are not affected by the relationships between the involved parties.

The proposed CT regime mandates the application of the ‘Arm’s Length’ principle to transactions between Related Parties and Connected Persons.

The Role of IMC

With several guidelines, disclosures, and documentations to adhere to, multinational companies might find it transfer pricing trickier to include as a financial risk manager. With IMC willing to help, it becomes easier to comply with the master file, country-by-country reports, local documentation, and other transparent practices related to transfer pricing.

At IMC, we make sure that the company abides by all the international tax-based standards, in a risk-free, efficient, and compliant manner. We help companies by assessing their tax and transfer based movements while keeping the country-centric documentation and thresholds in mind. Besides that, we conduct in-depth research and analysis of the existing assets and liabilities pertaining to the supply chain, to simplify transfers further.

Our existing transfer pricing and country-by-country reporting services include

Lastly, we also take care of the detailed process of documentation, where we approach every transfer depending on the country of origin.
  • Handling local audits
  • Paying attention to the country-centric duty acts
  • Dispute resolution
  • Working alongside the Competent Authority
  • Optimizing the Business Model
  • Documenting local file based on the local tax regulations
  • Assistance with foreign documentation
  • Advance agreements regarding price negotiations
  • Mutual Agreements
  • Treasury planning
  • Post-implementation review
  • Stress testing based on existing documents
  • Dispute avoidance
  • Obtaining double tax and other associated benefits for the parent company
  • Handling pricing adjustment
  • Striving for the ETF or Effective Tax Rate
  • Assessment, Analysis, and Documentation
  • Master file development
Why Choose IMC?

Our professionals understand that the taxation and associated rules apply differently to transfer pricings and are quite complex in nature. Moreover, with government officials looking to conduct audits to identify loopholes, the process becomes all the more stressful. This is where professional help comes in as we help companies develop policies that can maximize after-tax profits while minimizing penalties and adjustments.

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Contact Us
  • 175+ Countries
  • 525+ Locations
  • 17,500+ Professionals
  • 2350+ Global Partners
Contact Us
  • 175+ Countries
  • 525+ Locations
  • 17,500+ Professionals
  • 2350+ Global Partners
Contact Us
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