When a transfer pricing review is useful
The review is relevant where a company transacts with related parties, such as sister companies, branches or agencies, and has price-setting procedures in place. Confirming that those procedures are sound reduces the risk of a tax dispute if the transactions are later examined. It also shows, before any audit, where the documentation would not support the position taken.
What the review covers
We check whether the procedures in place correspond to the actual business practice and whether the documentation is maintained in line with those procedures. We also assess the scope and the form of the documentation prepared against the tax and procedural requirements. Particular attention goes to whether the pricing rests on genuine market analysis and comparisons, or whether it would invite doubt from the tax authorities.