Transactions between related companies must be priced as though they were taking place between independent parties.
We help clients establish and document arm's-length pricing for intercompany transactions, including services, management charges, sales of goods, financing and the use or licensing of intellectual property. This may involve cost-plus arrangements, service fees, royalties and other pricing approaches appropriate to the transaction.
Transfer pricing depends on more than selecting a percentage or applying a standard markup.
We look at the functions performed, assets used and risks assumed by each entity, together with the economic substance of the arrangement and the markets in which the companies operate. Where appropriate, this includes functional analysis, selection of a transfer pricing method, benchmarking and comparable-company analysis to support the pricing applied.
We also assist with intercompany agreements and transfer pricing documentation, working with specialized providers where formal studies or country-specific requirements apply, and reviewing arrangements as operations or relationships between group companies change.