Transfer pricing analysis

Transfer pricing deals with determination of the prices charged between associated companies within the same group (i.e. under common control). From a tax point of view, transactions between related parties should be at arm’s length (i.e. in market terms). Any difference between transfer prices and arm’s length prices will require an adjustment of taxable profits for CIT purposes. Taxpayers are required to provide documentary support for their transfer pricing assessment, on request of the Tax Authorities.

Your situation:

  • You want improved understanding of functional risks and the risk profile of the company;
  • You need verification on whether transactions with related parties are at arm’s length;
  • You want better awareness of exposure areas in order to take corrective measures before a transfer pricing audit starts;
  • You need identification of optimization opportunities;
  • You wish to establish a basis for creating local transfer pricing documentation;
  • You need support in dealing with the Tax Authorities in the event of a transfer pricing audit.

Our services:

  • Identification and understanding of transactions with related parties (types, volume, pricing mechanisms, contracts);
  • Analysis of the functions performed, risks assumed and assets used by the company in order to understand its business model and role within the group;
  • Selection of appropriate transfer pricing methodology for assessment of whether transfer prices are at arm’s length;
  • Identification of sources of information for external and internal comparables;
  • Review of existing group transfer pricing documentation to assess its applicability and appropriateness for use in the local company;
  • Assistance in preparation and updates of local transfer pricing documentation by documenting the results of the analysis;
  • Assistance in assessing local transfer pricing implications of the proposed group business restructuring;
  • Support during tax audits performed by the tax authorities.

Contact us

Branka Rajicic

Partner, Tax and Legal services, PwC Serbia

Tel: +381 11 3302 100

Dragan Draca

Partner, Tax Services, PwC Serbia

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