Transfer pricing: does your company need a TP study report?
If your company deals with a foreign parent, subsidiary or other related party, the transfer pricing rules probably apply. Here is what they ask for.
Transfer pricing rules make sure that prices charged between related parties are the same as those independent parties would agree: the arm's length price. They apply to international transactions with associated enterprises, and to some large domestic transactions.
What is required
- Documentation: above the specified threshold, companies must keep detailed records showing how prices were set, usually in a TP study report.
- Accountant's report: a report in Form 3CEB, filed before the return due date.
- Master file and country-by-country report: for larger multinational groups.
Why it matters
Transfer pricing adjustments are among the largest sources of tax disputes. A clear study, prepared at the time, is the best defence in an assessment.