Transactions among related parties have a significant share in the business activities of both multinational and local companies. Tax authorities in Central and Eastern Europe become increasingly aware of the fact that transfer prices can substantially affect tax revenues and they focus their inspections on the transactions within groups of companies. The increasing importance of this issue is proven also by the active approach of the governments within the European Union to the issue of transfer pricing and by the action plan BEPS (Base Erosion and Profit Shifting).
Underestimating this issue may lead to additional tax, penalties, loss of investment incentives and other sanctions. Various international studies show that up to one third of tax inspections result in additional tax because of incorrectly determined prices among related companies in the group.
The expert team of BDO can help you to set up and document transfer pricing policies and to avoid risks associated with this issue, no matter if in the Central and Eastern Europe region and worldwide.
We want to provide you with truly valuable service; therefore, we have to fully understand you and your goals. We will start our work on the transfer pricing documentation only after understanding your processes, systems and worries. Our approach includes the following:
- Methodological guidance
- Risk identification and preparing of defence strategy
- Determination of pricing methodology
- Benchmarking using the Amadeus database
- Processing of the documentation
- Master File
- Local Files
- Country by country reporting
- Preparation of contracts
Transfer pricing documentation prepared in advance and based on the principles determined by the tax authority, is a good basis for success minimizing the risk of additional tax assessment.