Transfer pricing is the setting of the price for goods and services transferred between controlled (or related) legal entities within an enterprise. Transfer pricing involves the assignment of costs to transactions for goods and services between related parties. Transfer pricing is typically used for purposes of financial reporting and reporting income to taxing authorities. Its main objective is to ensure that transactions between associated enterprises take place at a price as if the transaction was taking place between unrelated parties.
Through Transfer Pricing Rules, the companies are able to maintain their business structure in a flexible manner. With globalization, the multinational businesses want to harness the potential of right framework of conducting business transactions keeping related countries’ tax exposure. We work with you to understand your business model and advise on this critical aspect of business.