Arcotia Hatsidimitris - International Tax Dialogue

ANNEX D – 103
• The approach from jurisdiction to jurisdiction is checked for consistency.
• Changes to the business, including restructurings, are examined to ensure the changes are
adequately reflected in new transfer pricing policies and pricing.
Transaction basis
• The volume/value of intergroup transactions is analysed as a percentage of the company’s
activities.
• If there are significant intergroup transactions then further analysis is likely to be necessary.
• Transactions where substantial penalties are potentially liable are also reviewed.
• The methodology used for pricing the transactions is also reviewed – and atypical or non-
OECD compliant methodologies selected for further examination.
Discussions with management
• The business’s approach to transfer pricing and the investment made in establishing arm’s
length prices are evaluated. For example, who is responsible for transfer pricing (i) globally
and (ii) locally? What is the in-house team’s level of transfer pricing competence, and/or is
the work outsourced to competent professional advisers?
• Are transfer pricing questions factored into the group’s approach to business, e.g. tax sign off
on changes to business operations, tax representation at operational strategy meetings, etc.
The more involved the tax department is with operational changes the less chance of
operations being out of line with transfer pricing policies.
• Is transfer pricing documentation up to date? What processes does the business have for
ensuring (i) global consistency of pricing and (ii) adherence to local transfer pricing rules
and documentation requirements? Current documentation is often an indicator of wellmanaged
(and lower risk) transfer pricing.
• Does the business have Advance Pricing Agreements in place for key countries? Is the APA
treatment consistent with pricing policies in other jurisdictions?
• Do the business’s systems support analysis of arm’s length intercompany transactions?
DEALING EFFECTIVELY WITH THE CHALLENGES OF TRANSFER PRICING © OECD 2012