Monitoring and Adjusting
Underlying transfer pricing process and results should be monitored regularly, with a system of making adjustments enabled when relevant and useful.
In a mature transfer pricing environment, business changes that take place over an extended period of time may result in inconsistencies between the transfer pricing policy developed several years ago and the underlying functional and risk profile of the business. Such inconsistencies should be remediated to avoid a tax authority disregarding your transfer pricing positions and developing their own.
Q – Can we make adjustments to our transfer prices if our results are not as we would expect them?
A – It depends. Consideration must be given to the materiality of the potential adjustments, how the adjustments are implemented, the timing of the adjustments, the jurisdictions involved and the impact on other issues such as customs and VAT.
For any transfer pricing questions related to monitoring and adjusting results, contact firstname.lastname@example.org.