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TRANSFER PRICING DOCUMENTATION

ECS approach to transfer pricing documentation aims to combine compliance-oriented and policy-guiding approaches by developing intercompany pricing policies grounded in sound business strategy and well-established economic principles. Our thorough analysis of the industry structure and its value chain combined with rigorous analytical methodologies and clear presentation of the results allow us to develop transfer pricing solutions that meet both our clients’ business objectives and the arm’s length requirements imposed by national tax authorities..

LOCAL FILE

ECS assists clients with several aspects of “local file” implementation including:

  • Reviewing intercompany transactions to determine the appropriate units of account and material income tax positions, and to create appropriate recognition and measurement methods.
  • Providing advice on audit policies and administrative procedures followed by the tax authorities.
  • Preparing transfer pricing documentation to inform management.
  • Setting up measurement procedures that involve calculating the amount of tax benefits related to transfer pricing, projecting alternative outcomes that might be realized in resolving the position, calculating probabilities of realization of each outcome, and cumulative probability analyses.
  • Creating an implementation process to update transfer pricing analysis on annual basis.

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ADVANCE PRICING AGREEMENT

An Advance Pricing Agreement (APA) is an agreement, usually for multiple years, between a taxpayer and at least one tax authority specifying on transfer pricing methods to allocate income between related parties. The APA program is designed to provide increased certainty regarding, and to assist tax payers in resolving, future transfer pricing issues in a cooperative manner as opposed to the traditional examination process.
While an APA focuses on future tax years, tax authorities will often agree to resolve transfer pricing issues pending from prior years. For tax payers and the tax administration, this has the advantage of resolving many years of potential tax issues, existing transfer pricing audits or adjustments in a single process.
Other benefits of APAs include:

  • The security and tax certainty of an APA provides taxpayers the ability to prepared improved budget forecasts for related party transactions
  • APA also reduces the incidence of double taxation,
  • The APA process is a cooperative approach to resolving potential transfer pricing disputes. With the sharing of information between the taxpayer and tax authority, the potentially adversarial nature of a transfer pricing audit is avoided.
  • Taxpayers will avoid the expense of undertaking regular documentation studies for transactions covered by the APA since an executed APA satisfies transfer pricing documentation requirements.

Transfer Pricing

ECS takes a risk-based approach to advising on your optimal form your transfer pricing documentation. ECS does not follow a one-format-fits-all philosophy. The following key issues are addressed:

  • Should your documentation follow a centralized or decentralized approach?
  • Can one report be prepared for two or more countries, or should your receive multiple reports? Would a Masterfile structure be applicable to you?
  • Can annual updates be prepared? If so, for how many years before a new report should be issued?
  • ECS takes pride in providing pragmatic and cost-effective solutions for our clients.

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SERVICES AND EXPERTISE

Your business is growing. It is time to open branches or subsidiaries overseas
Biggest question: how local tax rules will imply whole group’s business performance?
We are here to answer those questions. We support you to prepare business structure cross-jurisdiction.
We design and creating most acceptable group structure will working optimally around the globe.

ECS’s independence allows for a wide variety of transfer pricing services. Our insightful and pragmatic approach provides value to small, medium and large multinational companies.

ECS is utilized by top-ranked law firms and professional services firms to provide transfer pricing analysis.

ECS works with you to determine the best balance of providing assistance to in-house transfer pricing departments or providing comprehensive transfer pricing assistance.

ECS experts have a rich of expertise in the following types of services:

  • Analysis of transfer pricing policies
  • Design and implementation of transfer
  • pricing policies
  • Transfer Pricing Documentation
  • Expert services
  • Tax provisions review for transfer pricing
  • Local country transfer pricing reviews
  • Audit support
  • Litigation support
  • Benchmarking

MASTER FILE

A “Masterfile” approach to transfer pricing documentation is a practical and cost-efficient solution for MNCs with operations in a group of countries that follow a common set of transfer pricing principles, such as those outlined in the OECD or UN Transfer Pricing Guidelines documentation requirements.
Best practices in creating master files combine the centralized approach to documentation development with information gathering and review at the local level. ECS global network of transfer pricing experts provides MNCs with the capabilities to utilize our extensive data resources to implement this robust approach.