Our Transfer Pricing approach
Transfer pricing has gone through a seismic shift in recent years. It has been a key area of focus of the OECD’s Base Erosion and Profit Shifting (“BEPS”) initiative. Tax authorities around the world have also become increasingly aggressive which poses a big challenge to the multinationals.
Local and regional rules and regulations are fast changing. For example, HMRC’s introduction of TP documentation rules and subsequent guidance on analysis of TP risks, EU’s adoption of pillar 2, OECD Amount B, and adoption of BEPS Action 13 by many new jurisdictions. These changes make it increasingly onerous for multinationals (of all sizes) for not having a robust TP policy, defensible TP documentation and a comprehensive controversy strategy.
For companies that are at initial or advanced stage of, or are contemplating international expansion, it is critical to have a pragmatic, flexible and defensible transfer pricing structure so TP can become an enabler in their global journey rather than an impediment. Supply chain and value chain restructuring, increased use of technology, transfer of intangibles and people movement due to Brexit and post-pandemic business realignment are leading to more nuances in globalised business models and an increasing number of related party transactions. In addition to documentation, controversy and dispute resolution (e.g. tax authority audits and enquiries, bilateral Advance Pricing Arrangements, Mutual Agreement Procedure, etc.) are key areas of focus in transfer pricing life cycle.
We, at Menzies, work as your partner through your transfer pricing journey. We provide bespoke advice to our clients on end-to-end full TP life cycle.
Our Transfer Pricing services
- Risk review/due diligence
- Policy design
- Benchmarking
- Documentation – Local files (for UK and other jurisdictions), Master file, Country-by-Country Report (CbCR), and Local TP forms.
- Advisory – Policy/operating model design, Assessment on impact for HMRC risk guidance, Review Amount B position, Restructuring, Intangibles planning and migration.
- M&A transactions/deals – Due diligence (“DD”) & Vendor due diligence (“VDD”), Post-transaction transfer pricing policy design and alignment, documentation and defence
- Controversy and dispute resolution – Audit defence Advance Pricing Arrangements (APA), Mutual Agreement Procedure (MAP), Profit Diversion Compliance Facility (PDCF), Support for Business Risk Reviews (BRR).
