DID2 APPROACH TO TRANSFER PRICING

Scaling your business internationally? Changing your business model? Integrating a new acquisition? Adjusting how your IP, goods, services and assets move, and are employed within the group?

We have refined our approach in numerous projects, we understand the risks, and have proven to deliver results in even the most complex multidisciplinary engagements. Our D.I.D2 approach can help you move fast and be sure that change is landing well.

It’s a modern take on transfer pricing project lifecycle.

Our track record of happy clients speaks for itself.

DESIGN

THE KEY FEATURES OF THE DESIGN STAGE

We analyse ‘as-is’ and ‘to-be’ business structure, conduct functional and value chain analyses, and refine feasible working solutions for intercompany transactions and surrounding business organisation to ensure we have practical discussions with you. The aim of the design stage is to determine the most appropriate transfer pricing (and business) structure ready for the next growth stage.

Deliverables include the anticipated transfer pricing model, key considerations and a detailed implementation plan.

Collaborative work Immediate deliverables iterations Easy to follow deliverables Continuous discussions Involvement of relevant stakeholders Milestone meeting

IMPLEMENTATION

IMPLEMENTATION STAGE STEPS

Change is complex. We can help you implement the new transfer pricing structure, ensuring that the intended design becomes reality, and not just beautiful on paper.

  • Project manage the full implementation process within your organisation

  • Support you in addressing any roadblocks and red flags identified in the design stage

  • Ensure local tax and transfer pricing compliance

  • Review intercompany agreements

  • Prepare and implement cost allocation / profit allocation methodologies

  • Conduct benchmarking studies to understand the market profit level indicators (mark-ups, margins, other) for selected transactions

  • Work together with your treasury / finance teams to work out optimal intercompany financing arrangements

  • Review permanent establishment tax risks, esp. considering remote / split cross-border working arrangements, and work together to proactively manage them

  • Work with finance / accounting teams to map, develop and automate intercompany fee calculation and invoicing processes (see Consulting & Valuations section for more)

  • Develop intercompany invoicing tools (see Bespoke IT Solutions section for more)

DOCUMENTATION

We provide a full range of transfer pricing documentation services. We ensure a smooth process and compliance with global and local regulations.

Within the DID2 approach, the Design and Implementation stages lead to the preparation of fit-for-purpose documentation to ensure an end-to-end solution.

TRANSFER PRICING POLICY

A document summarising the intercompany transactional structure, functions-assets-risks deployed, value chain and choices for transfer pricing methods and pricing to be applied.

Transfer pricing policy typically serves well in communicating group and transfer pricing structure to stakeholders internally and externally, providing summarised inputs for annual transfer pricing documentation.

TRANSFER PRICING DOCUMENTATION

Entities transacting with related parties would usually require to comply with local transfer pricing documentation requirements.

TRANSFER PRICING DOCUMENTATION TYPES

  • Master files

  • Local files

  • Country-by-Country reporting

  • Generating reports for other compliance obligations (see Bespoke IT Solutions)

We act as a centralised contact point for global transfer pricing documentation needs. We centralise your efforts across the group to create efficiency, refine processes and introduce automation. We work with local advisors to ensure continuity and provide full coverage and can address the local requirements in any jurisdiction relevant for you.

BENCHMARKING STUDIES

We conduct benchmarking studies in most transfer pricing specific databases to support the pricing applied on intercompany transactions with the market data.

  • PLIs for goods and services provided

  • Royalty rates for intellectual property licensed

  • Interest rates on intercompany loans issued

  • One of the kind economic analyses for more complex transactions

OTHER DOCUMENTATION NEEDS

Different situations may demands different documentation. We are happy to stay close and help you with a variety of documentation engagements you may need us for.

  • Transaction-based documentation

  • Defence files

  • Business Case for Change

  • Advance Pricing Agreement (APA) submissions

  • Accounting policies

  • Etc

DEFENCE

We have the technical expertise, a wide network of partner firms, as well as an understanding of local tax rules and procedures in various jurisdictions to support you in controversy and defence projects.

  • Full scope assistance and economic analysis during Advance Pricing Agreement (APA) and Advance Thin Capitalisation Agreement process

  • Negotiations with tax authorities and assistance during audits

  • Expert witness in court cases