Our experts help clients prepare a transfer pricing policy, which is a coherent, standardized and transparent set of rules and principles for the execution of transactions between related entities, taking into account the individual management levels planned for the organizational structure of the capital group.

The transfer pricing policy is an element of the transfer pricing system, the operation of which is aimed at achieving the strategic and operational goals of the enterprise.

The main goal of the transfer pricing policy is appropriate, from the point of view of the company’s goals, as well as tax regulations, shaping the rules for the implementation of transactions between related entities, which is performed through the following processes:

  • standardizing the transaction execution process,
  • standardizing the valuation of the transfer of assets or benefits; and
  • standardizing the principles and rules of controlling the execution of transactions.

The implementation of the indicated processes rests with the persons to whom the transfer pricing policy is addressed, in particular the management of the capital group, management of individual related entities, personnel of financial departments (divisions), personnel of operational departments (divisions) and personnel of human resources management departments.

Transfer pricing policy preparation procedure

The procedure for drawing up a transfer pricing policy includes at least the following points:

  • analysis of the capital group’s strategy and division of this strategy into tactical and operational goals,
  • analysis of the organizational structure of the capital group and internal management subsystems,
  • data analysis in the field of historical and ongoing transactions,
  • analysis of possible transactions in the future (simulation of possible transactions based on the analyzed data and strategic goals of the capital group),
  • analysis of internal procedures in the field of internal control and risk management,
  • analysis of legal regulations in the country where the capital group is headquartered and in the countries where the policy will be implemented,
  • cost accounting analysis,
  • analysis of the management remuneration system of related entities,
  • analysis of the system of evaluation of individual achievements of related entities,
  • preparation of an effective procedure for managing documenting transactions,
  • preparation of a settlement system and control of transaction execution,

and many others aimed at ensuring the proper operation of the transfer pricing policy.