Embridge offers a wide range of transfer pricing services, ranging from compliance to dispute resolution and transfer pricing optimisation. We typically work with fixed fees and tailor the scope of the project upfront to manage client expectations and set clear deliverables and timelines for the project. With a practical and hands-on approach we provide what is needed taking into account both local regulations as well as your preferences.
We offer transfer pricing compliance services across Europe. We can assist in drafting local files, master files and the country by country report. As transfer pricing regulations are harmonised across countries, we offer efficient solutions when it come to documentation of local files for multiple entities. For example, we can assist in developing reporting templates that can be used as a basis for local files and assist you in implementing and managing the template for compliance purposes.
Compliance projects are not always straight forward. Although the aim is to arrive at transfer pricing documentation, a compliance project may reveal transfer pricing misalignments, inconsistent application of a transfer pricing policy and/or missing supporting documents and agreements. In those instances, we address the issues encountered and further discuss how to deal with situation retrospectively and looking forward.
Benchmarking is a key element of transfer pricing. Benchmarks support the arm’s length nature of intercompany transactions. Benchmarks can either be used to determine a price upfront or to support an existing transaction. Benchmarks prepared upfront allow clients to select an arm’s length price that minimises transfer pricing risk while taking into account potential tax efficiencies. When benchmarks are prepared retrospectively, the primary goal is to support the arm’s length nature of the existing transaction. As the price can no longer be amended, these benchmarks may be complex if prices deviate from the arm’s length principle.
Embridge has access to a wide range of databases that can be used for benchmarking purposes. Besides subscription based databases, we also use publically available sources where needed. Through our experience, data availability and creative mind-set, we are able to offer a wide range of standard and non-standard benchmarking solutions.
Transfer pricing optimisation
Transfer pricing is not a black and white science. Typically there are various profit allocation models that can be applied for a specific business model. We can assist in discussing and “shaping” transfer pricing scenarios that fit your current and/or future operating model. We have in depth experience in introducing and optimising transfer pricing structures in a broad range of industries. Clients often engage us is an early stage of an optimisation project (viability and feasibility stage) where brainstorming, financial modelling and scenario analysis are essential to understand all options available.
As tax authorities become more knowledgeable, transfer pricing audits have increased in complexity. With BEPS, tax authorities have obtained more regulatory power and easier access to information then before. Potential disputes typically start with (standard) questionnaires send out by the tax authorities. Being able to answer these questions “correctly” requires full understanding of the case at hand from a transfer pricing perspective. Answers that do not align with existing transfer pricing documentation or that are inconsistent with accounting data or historical events may raise more questions and may potentially lead to tax adjustments.