Transfer Pricing

Transfer pricing is relevant for businesses that enter into transactions with associated enterprises, especially in cross-border group structures. It may apply to international transactions and specified domestic transactions wherever applicable.

Common related-party transactions may include management fees, technical service charges, royalty payments, cost sharing, reimbursements, inter-company loans, product sales, support services, software services, marketing support, back-office services, and shared resources.

Who is this for?

• Foreign-owned subsidiaries with cross-border group transactions
• Companies with associated-enterprise dealings
• Groups with management fees, royalties, or inter-company services

What it involves

Transfer pricing requires businesses to maintain documentation that explains the nature of the transaction, relationship between parties, pricing method, commercial rationale, agreements, invoices, financial data, and supporting evidence. In many cases, certification and reporting may also be required.

Eraqus Advisors helps clients organise transfer pricing compliance from a business and documentation perspective, transaction mapping, record collection, agreement review coordination, TP study coordination, Form 3CEB coordination where applicable, and alignment with accounting and tax records.

Key considerations

• Mapping all related-party and cross-border transactions
• Agreements, invoices, and supporting financial data
• Pricing method and commercial rationale
• TP study and Form 3CEB coordination where applicable

Ongoing compliance

Transfer pricing should not be addressed only after the financial year ends. The business model, inter-company agreements, invoicing pattern, and accounting records should be aligned from the beginning.