Transfer pricing services
Market research consistently shows that for international business, transfer pricing continues to be the most significant international tax issue.
Tax audits are becoming more focused in most countries, with an increasing number of specialists at the heart of the fiscal authorities. The exchange of information between different countries is becoming much more prevalent, leading to greater clarity over cross border tax takes.
The issue is not just confined to large multinationals. Medium sized and family businesses are also affected where their trading operations take them overseas. It is often in this area that there are easy pickings for tax inspectors descending on businesses which previously treated transfer pricing as a low priority.
Our transfer pricing team meet and work together frequently to a common standard, so you can be confident of consistency and good communication, key areas in the arena of International Taxation.
Advance Pricing Agreements and elimination of double taxation
The possibility of reaching Advance Pricing Agreements with the tax authorities for fixing a transfer pricing policy in a particular controlled transaction provides a greater degree of legal certainty to the companies.
Transfer Pricing advises and manages the entire negotiation process in Advance Price Agreements with the Spanish Revenue Agency, in order to obtain the approval of the agreement granting greater legal certainty to the client. In the same way, with the support of the professionals of our international network, our firm advises on negotiating such agreements with foreign tax authorities in bilateral or multilateral processes.
Elimination of Double Taxation
In case that a tax audit ends up with an adjustment of transfer prices of a taxpayer, a double taxation situation arises automatically if that state is not regularized (compensating adjustment) in the other related entity.
Transfer Pricing advises on possible forms of removal of double taxation, both at accounting and at tax level, based on the regulations of the jurisdictions involved as well as on the possible existing solutions in accordance with current legislation.
Our Firm assists taxpayers in resolving Mutual Agreement Procedures for the elimination of double taxation or MAPs and in the preparation of international arbitration conventions.
Transfer Pricing Audits
We conduct the process and assist our clients in Transfer Pricing audits started by Tax Authorities
The verification of related transactions has become the central axis of the Annual Audit Planning of the Spanish Revenue Agency, being its main exponent the National Bureau of International Taxation (“ONFI”), set up with the aim of fighting against international tax fraud and Transfer Pricing issues.
The complexity of Transfer Pricing requires a high expertise in international taxation, economic analysis and valuation, focused on this specific subject.
As tax advisers specialized in Transfer Pricing, we assist our clients in Transfer Pricing audits started by Tax Authorities, conducting and advising them throughout the process. We work in coordination with the professionals of our international network for Tax Audits initiated in foreign jurisdictions.
As back office, we give support to our clients-professional partners in the audit and verification processes they manage.
Risk Review and Global documentation of controlled transactions
Transfer Pricing Risk Assessment and Global Documentation policy of controlled transactions
Transfer Pricing Risk Assessment:
We conduct reviews on Transfer Pricing policies and business operations in order to identify risks and minimize them.
Global Documentation Policy:
Not all countries have transfer pricing regulations or require transfer pricing documentations. As a result, it is necessary to set up a documentation policy according to the needs of each group and their countries of residency always according to the standards of the OECD. Our firm advises Spanish companies and multinational groups on establishing an effective documentation policy for the group as a whole and for the entities belonging to it. Our work comprehends the following:
- Draft of the documentation regarding controlled transactions at a group level (CbCReport and master file) at an individual company level (local file) with the support of our worldwide network with presence in 79 countries.
- Advice and train the staff of the company for the future management and update of the documentation in subsequent financial years.
- Assist and bring to completion tasks carried out by the company by performing checklists, economic analysis and benchmarking studies to complete and update the transfer pricing documentation in subsequent financial years.
Transfer Pricing Restructuring
We validate and value Merger & Aquisition and Corporate transactions from a transfer pricing perspective
Our Firm advices throughout the entire restructuring process, this is, from the initial preparations until the effective process has finalized, with the following objectives:
- Assure and justify the rationality in the restructuring operation (“TP business purpose test”)
- Identify the transfer of tangible and intangible assets, and valuate them
- Establish and value the need of an economic compensations towards the related entity affected by the restructuring process
- Assure the correct alignment of functions-risks-profitability-taxation regarding the post-restructuring process
- Built the documentary compliance of the restructuring focusing on justifying and validating it from a Transfer Pricing perspective
We also perform the TP Due Diligence of the entities involved in M&A transactions.
Transfer Pricing will work in coordination with the manager, consultants, accountants and lawyers of the company.
International Advice and planning in Transfer Pricing
Design, planning and implementation of Transfer Pricing policies within multinational groups and TP advice in business restructuring and internationalization
In the current global economy context, most companies have internationalized becoming multinational groups of various sizes. Traditional business models have given way to the digital economy and e-commerce, opening opportunities for companies but also generating new challenges in the tax area and, in particular, in Transfer Pricing.
In this scenario, business groups centralize services, initiate corporate restructuring, buy or sell companies, sign distribution and/or manufacturing agreements with other entities of the group, open or close branches and subsidiaries abroad, start online businesses, centralize the treasury, charge royalties for assignment of trademarks, finance or grant warranties to other companies of the group, etc.
In all these cases, setting a proper Transfer Pricing policy aligned with the business strategy of each company is a key subject (“Value Chain analysis”), both for the efficient management of the supply chain of goods and services and for identifying and avoiding tax risks.
Our services are focused on:
- Design, planning and implementation: At national and international level we advise companies and multinational groups in the design and planning of the most proper Transfer Pricing policy for their business strategy and operational, assisting them in the further implementation of the policy.
- Internationalization and Business Restructuring:Our Transfer Pricing professionals advise on Transfer Pricing in the process of internationalization and business restructuring, both in setting the new related operating as well as in the justification and validation of these business process for Transfer Pricing purposes.
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David Canabate Partner - Madrid
En el actual escenario de lucha contra el fraude fiscal impulsado por las autoridades y reguladores a nivel internacional y local, las empresas pueden tener que hacer frente a nuevos conflictos y litigios derivados de los precios de transferencia en sus operaciones intragrupo, que siguen siendo una de las cuestiones críticas para las compañías.
The new scenario arisen after the plan to fight against tax fraud launched by the OECD/EU (BEPS Action Plan), companies must face important challenges to cover new risks, which will only be achieved through anticipation (preventive advice) and review measures (compliance).