Transfer pricing is the practise of determining prices of (international) transactions within a multinationally operating concern. It is important that the entities within a multinational are setting prices for their services and goods that are comparable to the prices that independent comparable parties would set when providing the same goods or performing the same services. This is called the ‘at arm’s length principle’. Transfer pricing provides methods and rules for setting prices for goods, services, royalties and internal loans (interest) between the different affiliated companies within the concern.
Risk management for multinationals
Transfer pricing has proven to be one of the major risks for multionationals today. Globally, the tax authorities are becoming more and more aware of the importance of transfer pricing for their tax income. This is one of the reasons why the Organisation for Economic Co-operation and Development (OECD), the European Union and the United States of America are implementing more international guidelines and more extensive international guidelines regarding transfer pricing. Besides these guidelines, several countries are also implementing more detailed and strict national legislation. Because of the aforementioned measures, big corporations such as Google, Amazon and Apple recently received significant additional tax assessments. The legislation does not only apply to big corporations, but to all multinationally operating companies. To minimise the risk of additional tax assessments and fines or other sanctions, your multinational company must be able to immediatly show that you comply with the obligations and regulations concerning transfer pricing.
Optimising your tax position
ABAB International has specialist transfer pricing-advisors with a wealth of experience in assisting multinationals with their TP-policy. We know exactly how you can comply with the transfer pricing obligations, both in the European Union and worldwide. We analyse the facts and circumstances within your multinational company, taking into account future restructuring wishes and all the relevant legislation. Based on this analysis, we can provide you with an in-depth advice on how to optimise your (worldwide) tax position.
Our services include, but are not limited to:
- providing you with the relevant documentation regarding transfer pricing;
- performing and documenting benchmark studies;
- avoiding double taxation for your company;
- providing you with certainty (ahead of time) regarding your tax position in the Netherlands via Advance Pricing Agreements with the Dutch tax authorities.