Transfer pricing

Transfer pricing is in the focus of tax authorities as an inevitable consequence of the global economic development and the emergence of large multinational companies which operate in a number of countries through its subsidiaries and affiliated companies.

Why is transfer pricing attracting the attention of the tax authorities? On one hand, the pursuit of tax authorities to collect as much tax revenue and thus enable the functioning of the state apparatus, and on the other hand the multinational companies through controlled transactions with related parties have opportunity to transfer profit from tax jurisdiction with the higher on tax jurisdiction with a lower rate of income tax and, as a result of it, to pay a lower income tax. This fact imposed increasingly complex demands in front of the tax administration, which must create a mechanism for checking compliance of controlled transactions with the principle of “arm’s length” and market principles, and in front of the taxpayers who have the obligation to prepare report on transfer pricing and elaborate compliance controlled transaction with the principle of “arm’s length” based on the most reliable assessment in accordance with the available data.

Theme of transfer pricing is equally important from the point of view of tax administration, both for international business as well as for transactions conducted between related parties in the country.

To help customers to meet the aforementioned obligations and requirements regarding to issues of transfer pricing, our company performs the following professional services:

  • Preparing the reports on transfer pricing,
  • Consulting in the preparation of the reports on transfer pricing
  • Making analysis of comparability of transactions, functional analysis in controlled transactions and other analyzes,
  • Analysis and continuous consulting regarding to pricing policy with related parties,
  • Consulting and assistance in preparing intercompany agreements,
  • Support in the process of tax control.

The legal framework of our services

Legal and professional regulations which is the framework of our commitment and work in rendering services related to transfer pricing is:

  • Law on Corporate Income Tax of Republic of Serbia,
  • Rulebook on transfer pricing and methods according to the “arm’s length” shall apply in determining the price of transactions between related parties and
  • Guidelines of OECD (Organization for Economic Cooperation and Development) for the implementation of the rules on transfer pricing for multinational enterprises and tax administrations, which have been translated and published by the Serbian Fiscal Society at July 2010.