Transfer pricing. Added value of a transfer pricing study
Numerous companies tend to see transfer pricing studies as a commodity.
Reasons? Among others, it is required by law, it doesn’t add value and therefore the cost are (too) high.
Yes, a transfer pricing study is, in most cases, required by law and will cost money. However, is, at least to my opinion, no commodity. a transfer pricing study can provide valuable information for your organization and therefore add more value as you would have expected.
Of course, the main goal is to avoid or minimize the risk on disputes with tax administrations and double taxation. This is realized by having an at arms’ length price in place for the intercompany transactions, including, among others, thorough justification of the price and the chosen transfer pricing method.
To perform a transfer pricing study, which fulfils the applicable rules and regulation in the applicable countries, detailed information about the company, strategy, competitors, assets used, functions performed and much more are needed. These activities result in a detailed blueprint of your company, thus provide valuable information about the effectiveness and performance of your company. This information can easily be transformed to strategic valuable information, which can help you with numerous questions.
-Does the current setup of functions performed add value or works effectively?
-Do assets used add value or are these effectively used?
-Does the current risk management cover all major risk?
-How can I improve my profitability?
Ex Nihilo can advise companies about the procedures, profitability, investments and strategy, based on the collected information during the set-up of the transfer pricing study. And this initial advice is free of charge.
Next to transfer pricing we also have numerous year of experience in business consulting, specialized in transferring data to information and how to interpret this information.
We can imagine that you have questions about this. Give us a call, we are more than happy to explain.