A sound transfer pricing policy is only useful if it has been properly implemented into an organisation.
Effective implementation may require additional in-house resources, systems enhancements, new processes and procedures, intercompany contracts, staff training and other administrative support.
Q – Do we need to have intercompany contracts in place?
A – Legal agreements documenting the terms and conditions of intercompany transactions are important evidentiary tools for transfer pricing purposes. They are often one of the first items of information requested under a tax audit and business reality will often be tested against the contract terms and conditions to ensure contract integrity and reliability.
Q – How do we turn our profitability benchmarking results into a per-product price?
A – This requires an understanding of your current financial reporting systems and level of data transparency. Each company requires a different solution depending on the systems and processes currently in place to support transfer prices. We have worked with several companies to implement a cost-plus or resale minus transfer pricing policy into a workable system-based process.
To discuss any transfer pricing implementation issues, contact firstname.lastname@example.org