Transfer pricing

Transfer pricing is the set of rules that ensures that companies belonging to the same national or international group apply at arm’s length prices in intra-group transactions and to ensure a correct allocation of profits occurs between those companies.

The importance of a sustainable transfer pricing policy

Price setting between independent companies is generally based on genuine business terms and conditions. Such third-party behaviour may not always occur between related companies belonging to the same group. Allocation of profits and determination of intra-group prices is sometimes driven by tax and accounting reasons. This increases the risk of double taxation and potentially tax evasion.

Transfer pricing has been high on the tax agenda for several years. The global structuring of transactions has a direct impact on the distribution of group profits between different countries and therefore also on the tax revenues in those countries. That is why it is important to implement a sustainable transfer pricing policy if you regularly perform intra-group transactions.

Arm’s length transfer pricing

The basic principle of transfer pricing is that intercompany prices should comply with the arm’s length principle, meaning that similar prices should have been agreed between third parties engaged in comparable transactions. All kinds of transactions are targeted by the arm’s length principle: sale of goods, provision of services, intellectual property licensing, financial transactions, etc.

Transfer pricing documentation

As of 2016, companies operating internationally and exceeding certain financial thresholds are obliged in Belgium to prepare and submit transfer pricing documentation. Experience shows that more transparency is often a source of more, and increasingly complex, transfer pricing audits.

How can Moore help you with transfer pricing?

Moore advises your company on setting up a compliant, robust and cost-effective transfer pricing policy. In that process, we take the group’s overall strategy and potential (international) tax opportunities into consideration.

You are assured of the following service:

We assist with the design and implementation of a (global) transfer pricing policy, including value chain analyses.
We conduct benchmarkinganalyses to determine arm’s length pricing for a range of intra-group transactions.
For example, sale of goods, provision of services, intellectual property licensing, financial transactions, etc.
We conduct transfer pricing analyses, including valuation exercises for restructurings and reorganisations.
Examples include changes in the operational structure, transfers of (in)tangible assets, etc.
We set up intra-group finance policies for loans, cash pooling and financial guarantees.
We prepare transfer pricing documentation in line with the OECD Transfer Pricing Guidelines for Master & Local File documentation, including the Belgian master and local file.
We prepare intra-group agreements for a wide range of intra-group transactions.
We make sure your Country-by-Country reporting is fully compliant.
We provide support during tax-related transfer pricing audits.
We apply for transfer pricing rulings to obtain legal certainty about your transfer pricing policy or a particular intra-group transaction.
We advise on the application of R&D tax and innovation incentives.
For example, the regime of innovation income deduction, investment deductions and R&D tax credits.

Why choose Moore?

We are the partners of our clients; together we build their future.
We do not strive to be the biggest or the fastest; instead, we set great store by a professional, personal, high-quality service.
We work together with our clients, we are their sounding board and offer them advice that goes further than the figures.
Moore Belgium is a division of Moore Global, an international independent network operating in more than 113 countries in all parts of the world. Moore Global network allows us to offer you global transfer pricing expertise and support.