Multinational companies operate in a complicated, constantly changing environment. The increasing volume and variety of intragroup transactions as well as the development of transfer pricing rules and their stricter enforcement on the global level make this topic one of the leading areas for group risk management.
- Transfer pricing planning and documentation
- Dispute prevention: advance pricing agreements (binding assessments)
- Supply chain management
We have a global network of transfer pricing specialists. Their goal is to:
- Provide advisory in this area;
- Design practical solutions with respect to the overall global functioning of businesses;
- Help with strategic transfer pricing documentation;
- Efficiently resolve disputes with tax administrations;
- Design a suitable methodology for pricing intragroup transactions; and
- Negotiate unilateral, bilateral or multilateral binding agreements.
Multinational companies are changing their existing approach to transfer pricing from passive ex post preparation of documentation to strategic management of intragroup price policy and the related internal processes, including the use of technology. To enter the world of modern transfer pricing, visit our global Transfer Pricing Readiness Center.
Transfer pricing planning and documentation
Multinational companies perform more and more transactions with related parties and an increasing amount of various advisory, management and administrative services are provided centrally within multinational groups. This fact, together with the increase of cross-border cooperation of tax administrations in the area of exchange of information on the individual jurisdictions (e.g. in the form of the Country-by-Country Report), brings companies many risks, but also opportunities.
Projects carried out in several countries are managed by Deloitte’s global transfer pricing centre. The centre involves experts from the fields of economics, tax and business management, with extensive practical experience and specialisation in the regions of Europe, America or Asia-Pacific. This approach allows for achieving compliance in reporting and eliminating internal discrepancies that can arise as a result of the use of services from several different providers. This entire process is thus more efficient, more effective and easier to defend in discussions with the tax administration.
Intercompany transactions (especially the provision of support or advisory services) are increasingly more often the focus of tax administrations, so it is necessary to prepare for defending the related expenses in advance. In this respect Deloitte’s experts from the transfer pricing or tax litigation teams are ready to provide valuable advice and extensive experience from local inquiries or tax audits focused especially on management fees.
Dispute prevention: advance pricing agreements (binding assessments)
Transfer pricing involves many tax, legal and operational questions. The level of uncertainty and the time consuming nature of the defence of transfer prices in the event of a tax audit represent an unacceptable business risk for many taxpayers. Advance pricing agreements (implemented in the Czech Republic in the form of the binding assessment) allow taxpayers to proactively participate in decreasing the tax risk by having their future transfer pricing methodology approved by one or more tax authorities.
Our experience with the conclusion of advance pricing agreements is extensive especially thanks to our participation in the negotiations of pricing agreements from the very beginning of these negotiation processes. In 2018 we successfully negotiated the first bilateral binding assessment between the Czech Republic and South Korea. Deloitte thus successfully built on the previously arranged bilateral binding agreements between the Czech Republic and Japan. Our knowledge and achievements in negotiations with tax administrations help companies manage the transfer pricing risk and eliminate possible double taxation.
Dispute resolution: defence during tax audits, mutual agreement procedure (MAP), arbitration convention
During a transfer pricing audit the initial reaction to the tax administration’s questions can have a (negative) impact on the progress or result of the entire proceedings. The best defence is therefore the engagement of an experienced global team that will help to create a strategy for dealing with tax authorities with a focus on suitable argumentation and defence of the transfer pricing set-up.
The history of Deloitte’s transfer pricing team includes the successful management of a variety of tax proceedings, from local inquiries of tax authorities to extensive tax audits with international overlap or court disputes. It also includes negotiations of unilateral pricing agreements or active involvement in MAPs or arbitration conventions.
We apply an integrated approach to the resolution as part of international negotiations between the tax administrations involved: the working team for MAPs/arbitration conventions is composed not just of transfer pricing specialists from both countries involved, but also local experts on indirect taxes, international taxes, local fees and the calculation of default interest, which can significantly affect the result of the proceedings and their impact on the subsequent functioning of the company.
Supply chain management
The global economic environment is characterised by constant technological development, pressure on the implementation of the best possible processes and procedures, and legislative instability. Successful management of the global supply chain of a multinational company is an integral part of its prosperous operation. Supply chain management is a process that ensures correct implementation of the group’s operating requirements while maintaining compliance with relevant tax laws.
We provide high-quality services in the area of tax and supply chain management that allow multinational companies to align their operating plans and tax impacts so that the company’s executives can focus on efficient management of the company.