Transfer pricing deals with assessment of the prices charged between associated companies forming part of the same group. The Serbian Tax authorities have recently shown increased interest in transfer pricing and failure to comply with legal requirements can result in significant penalties. We will review existing documentation supporting transfer pricing in order to verify compliance with Serbian transfer pricing rules and identify areas of risk. Non-compliance can result in issues such as: disputes with tax authorities, tax assessments and interest on tax underpayments and penalties.
Taxpayers must have in place an efficient framework for producing the documentation required to defend transfer pricing used in related party transactions.