Transfer pricing is determination of compliance of pricing in transactions between related parties that are typically part of the same holding company (group of companies) or with counterparties registered in low-tax jurisdictions or counterparties that do not pay income tax in their jurisdiction.
Thus, transfer price means the price set in business transactions between different members of a single group of companies and corresponds to the “Arm’s length” principle.
Setting a price in transactions between such companies, taking into account the “Arm’s length” principle is called transfer pricing.
Building of complex economic relations and involving counterparties from other jurisdictions allow, through the regulation of internal price, redistributing total profit of a group of persons in favour of the ones in countries (territories) with lower taxes.
This is the easiest and most common tax minimization scheme, which certainly attracts particular attention from any state.
The main objective of control by fiscal authorities over transfer pricing is to establish new standards for taxation on international principles. For this reason, this line not only remains relevant today, but also demonstrates active development, convergence of the State Fiscal Service of Ukraine with tax authorities of other states, implementation at the state level of standards for the exchange of tax information, etc.
Tax services around the world are expanding their staff engaging in the issues of transfer pricing. Moreover, the requirements to the reporting documentation became stricter.
Realizing that the size of the tax base may be influenced by setting special prices for goods and services, the regulatory authorities, are intended to prevent this practice and fully control it.
The experts of ID Legal Group render services in the field of transfer pricing in full. They include consulting and support at the stage of business transactions that are recognized as controlled, assistance in identifying controlled transactions, preparation of reports and documentation on controlled transactions for the fiscal authorities, risk analysis, drafting recommendations, etc.
Neglect of the transfer pricing issues leads to major consequences. The fiscal authority will make its own calculations and make claims in relation to incorrectly set prices and unpaid taxes. It is followed by penalty charging. You can prevent it by applying to the ID Legal Group. Our specialists will help to prevent penalties by means of professional support of transfer pricing Documentation.
There is a group on transfer pricing working at the ID Legal Group, which has a comprehensive approach to solving the existing issues. The group includes experienced lawyers, auditors, and tax consultants. We provide a full range of services in transfer pricing. Since the start of our activity, we have completed about 50 projects for Ukrainian and international companies.
Our main objective is the positive ultimate result, no matter at what stage we join the project.
The experience of the Team of ID Legal Group tells that there exist no no-win situations or losing cases – there is a positive way out of any situation subject to properly elaborated strategy.
First of all, it is necessary to create an internal system of transfer pricing control, which can reduce risks on the part of fiscal authorities and ensure readiness for possible inspections. To achieve it, ID Legal Group takes the following steps:
Since implementation of these procedures requires time and specific knowledge, it is advisable to start this work as soon as possible. This will minimize possible risks from the fiscal authorities.
ID Legal Group is not only preparation of reporting and draft documentation, but also its comprehensive support for 7 years, updating of documentation and support of inspections by fiscal authorities.
Within the legal framework, knowing the sequence of actions of regulatory authorities, the Team of the ID Legal Group will ensure the safety of your business - We provide for possible risks and behaviour of fiscal authorities.Remember that the most effective result is achieved when we take care of the enterprise from the very beginning! If you are interested in Transfer pricing service, perhaps you may be interested in the others:
Leave us your contacts and we will contact you