Transfer pricing represent the prices for goods and services transfer between affiliate companies. If your company deals with transactions with related parties, you are obliged to submit a transfer tax document which contains sufficient data to confirm the prices from your transactions with affiliated companies are in accordance with the “arms-length principle”.
When preparing documentation for transfer pricing, it is crucial that you pay attention to the following:
- The identification of affiliated companies.
- Whether the transactions with related companies exceed the limit for which a detailed bench-marking analysis and transfer pricing study must be undertaken.
- Information which needs to be included in a transfer pricing study for it to be in accordance to domestic legislation and best international practices.
- The methodology which is applied for determining the market price for the transactions with related parties.
- The effects of corporate income tax obligations regarding loans that you have given to or taken from related parties.