At Quantera Global, we believe that sharing knowledge is essential. The creation of the QG Academy is the ideal way to illustrate our beliefs. The purpose of the QG Academy is to foster relationships and exchange knowledge about transfer pricing. In addition to providing webinars and videos on a variety of subjects, our academy also provides answers to your most frequently asked questions about transfer pricing.
Questions about transfer pricing Below, we have compiled a list of the most frequently asked questions about the fundamentals of transfer pricing as well as more complex inquiries on particular transfer pricing subjects. Examples of transfer pricing questions we answer are:.
Only general? Our FAQ are mostly about general subjects. However, you might have questions about transfer pricing that are more focused on areas like cash pools or compliance strategy. Please refer to our website for more information. We go into greater detail about these particular transfer pricing topics on our services webpage.
- Are you familiar with the transfer pricing regulations in your country?
- What are some of the most important qualities for a transfer pricing manager to have?
- How would you go about determining the arm’s length principle for a specific transaction?
Transfer Pricing Interview Questions
Why do companies look at transfer pricing?
Tax authorities in many countries have the power to adjust intragroup transfer prices that are different from what would have been charged by unrelated businesses dealing at arm’s length due to the potential for cross-border controlled transactions to distort taxable income. For instance, the interest paid on an intercompany loan made by a parent company to a subsidiary in another nation may be written off as a taxable expense.
Companies must adequately document and support the pricing of these cross-border intercompany transactions in order to comply with transfer pricing regulations. Failure to do so could result in fines, and incorrect pricing could cause tax authorities to make adjustments that could change the amount of taxes due.
By structuring transactions to produce a favorable tax outcome by reducing revenue in a high tax jurisdiction and increasing it in a low tax jurisdiction, additional transfer pricing planning can minimize the taxes paid by entities.
What would someone who works in transfer pricing at a professional services firm look at in helping structure transfer pricing solutions for a client?
To support the pricing used by the client, transfer pricing staff would analyze the financials of the entities involved in the transaction, speak with key staff to determine the value provided by the transaction, research any applicable transfer pricing regulations, and conduct comparable benchmarking.
What is transfer pricing and why is it done?
The cost at which one party transfers goods or services to a related party is known as the transfer price.
In order to prevent base erosion and profit shifting, transfer pricing regulations and compliances were put in place for all globally related parties. Accordingly, every tax jurisdiction gets its due taxes.
The related parties transacting must ensure that they conduct business as if they would be dealing with an unrelated party in an uncontrolled scenario in order to understand transfer pricing compliance in a simple manner, i.e. e. , at arm’s length.
What is transfer pricing?
Transfer pricing, also known as associated enterprises, is the branch of taxation that deals with the pricing of transactions between related businesses. Examples of transactions include the provision of financial services, the sale of goods, the delivery of services, the use of intellectual property, and others. The price for such transactions between associated enterprises shall be comparable to the price that would be agreed upon between independent enterprises.
