Transfer Pricing Services in Luxembourg
Deloitte’s transfer pricing network helps companies manage risks by aligning transfer pricing solutions and the operation of their transfer pricing policies with their global business operations and objectives, assisting them in meeting compliance requirements including preparation of documentation to support their policies and practices, and resolving disputes efficiently.
The increasingly global nature of business and the constant presence of business change, whether through acquisitions, commercial reorganizations, supply chain improvements or as a result of external pressures such as regulatory developments, mean that the creation of appropriate and well supported transfer pricing policies is critically important. Deloitte’s strategic approach provides practical solutions to the challenges faced by multinational businesses, which help them achieve their transfer pricing and wider international tax objectives.
Deloitte’s transfer pricing team includes economists and tax specialists, many of whom have extensive experience of working in industry or in tax authorities. Our global reach facilitates uniformity and consistency of approach in an environment where tax authorities are increasingly collaborating and sharing information cross border, as can be seen from the OECD’s recent work on Base Erosion and Profit Shifting (BEPS), which proposes the introduction of new global transfer pricing documentation standards.
Transfer pricing documentation
International businesses are faced with increasingly onerous transfer pricing documentation requirements in different countries. For most businesses, complying with all these requirements is a challenge. Deloitte supports businesses both in determining a strategy for meeting transfer pricing compliance requirements and through the steps required to prepare transfer pricing documentation. Deloitte’s risk assessment approach, which assists with determining how to prioritize transfer pricing documentation requirements as well as taking account of the business drivers and the more practical aspects of preparing documentation, such as the availability of resource, enables the preparation of a detailed individual workplan that takes into account the need to manage risk along with the needs of the business.
When it comes to preparing documentation, Deloitte recognizes that there is not a ‘one size fits all’ approach for businesses. Deloitte’s flexible approach breaks the transfer pricing documentation process into its component parts and focuses on where the most value can be added. This ranges from a full outsource of the process through to input on the more complex transfer pricing areas. Deloitte’s team of transfer pricing specialists offers significant experience in all stages of the transfer pricing documentation process, in particular, the selection and application of transfer pricing methods, articulating how complex businesses operate in order to support the transfer pricing approach and practical experience of local transfer pricing requirements and tax authority approaches.
Alongside this flexible approach, Deloitte have developed a technology enabled, web-based solution, TP Digital DoX, which enables us to collaborate with our clients to adopt a centralized transfer pricing documentation approach and deliver consistent, efficient and streamlined documentation across multiple territories.
Operational transfer pricing
Transfer pricing is the heart of intercompany transactions and can have significant consequences if done incorrectly.
Operational transfer pricing refers to the practical issues that multinationals face in ensuring the accurate calculation and reporting of transfer pricing policies.
Multinationals are under increasing pressure from a very broad range of stakeholders to ensure visible compliance with the transfer pricing rules for multiple jurisdictions. Developing and documenting an appropriate transfer pricing policy is critically important but is only half the battle; ensuring that the business operates and records its financial transactions in accordance with the policy is what really matters to avoid contentious audits and adjustments.
Business model optimization
Business Model Optimization (BMO) is the process of understanding the demands of operations and of tax law, and of integrating them into the business model. Deloitte provides high quality, customized tax and BMO services that focus on helping multinationals integrate operational and tax requirements in a scalable and sustainable way in order to help business leaders to make effective decisions on an after tax-basis.
Deloitte delivers BMO services using the BMO Insight methodology, a set of experience-based approaches to developing solutions to a range of tax issues and opportunities.
Dispute prevention and resolution
Transfer pricing presents many tax, legal and operational challenges. To many taxpayers the magnitude of uncertainties - including the potential commitment of significant management time in the event of a transfer pricing examination - is not an acceptable business risk. Advance pricing agreements (APAs) allow taxpayers to achieve greater certainty via advance agreements on their transfer pricing methods with one or more tax authorities. Its historical knowledge and insight combined with more recent practical experience helps Deloitte assist companies to manage their transfer pricing issues - particularly the risk of double taxation - on a prospective basis.
In relation to disputes, often it is the actions and responses in the initial stages of tax authority enquiries or interviews that affect the course or outcome of a transfer pricing examination. Accordingly effective and efficient explanation of a business’ transfer pricing policies include early involvement of an experienced global team that has practical experience of all levels of the tax authority process, from proposed adjustments by local inspectors, through APAs, administrative appeals, litigation and the Mutual Agreement Procedure (MAP) process. Deloitte takes an integrated approach to resolving transfer pricing disputes in the MAP process. Our teams include transfer pricing MAP specialists from both countries in dispute teamed with professionals who specialize in local country requirements for indirect taxes, taxes imposed by local or state/provincial jurisdictions, international tax and interest calculations for late payment that invariably affect the outcome.