The transfer pricing concept is an increasingly important and contentious area of taxation around the world. It deals with the pricing of intercompany transactions to prevent multinational groups from reducing taxes inappropriately by entering into transactions among related parties on terms that would not occur in a comparable arm’s length situation. Around the world transfer pricing examinations and litigation have increased in number and scope and taxpayers have become increasingly vulnerable to double taxation. Governments are increasingly requiring extensive contemporaneous documentation justifying the pricing of such related party transactions.
The transfer pricing specialists from Hill Smith’s taxation group are highly experienced in conducting transfer pricing studies in various areas such as licensing of intellectual property, sales of components for use in manufacturing products or remote services, and intercompany financing and loans. Together with the corporate and commercial attorneys of Hill Smith, the results of these studies can be translated into solid intercompany agreements to ensure compliance with documentation and mitigating the risk of challenges by authorities.
Through our integrated approach Hill Smith provides tailor made advice on transfer pricing and tax planning strategies, enabling clients to comply with the documentation requirements of relevant jurisdictions while reducing their global effective tax rate. As part of these processes, advance pricing agreements can be negotiated for a number of years.