Increased focus on Transfer Pricing in tax audits
Today, tax audits tend to be digital and data-driven. Tax authorities worldwide are taking additional measures to assess the alignment between companies' operating models and their tax model. Examples are:
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OECD BEPS actions
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Increased compliance requirements (e.g. country-by-country reporting, Master file and Local file)
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Increased focus on Transfer Pricing in tax audits.
Approach to Transfer Pricing Controversy
We have developed a three-pronged approach to transfer pricing controversy. We can offer you the best solution for every possible situation. Our three-pronged approach to transfer pricing controversy consists of:
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Obtaining certainty in advance through an APA/BAPA (proactive strategy).
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Mounting a strong transfer pricing audit defense.
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Initiating a Mutual Arbitration Procedure if necessary.
Finally, we cannot stress enough the importance of high quality transfer pricing documentation as a solid foundation when dealing with the tax authorities.
Obtaining certainty in advance through an APA/BAPA (proactive strategy)
A proactive approach puts you in control of your Transfer Pricing position, preventing disputes further down the road. An Advanced Pricing Agreement (“APA”) or Bilateral Advanced Pricing Agreement (“BAPA”) is a perfect instrument for removing uncertainty about your Transfer Pricing.
Experience with APA/BAPA
We have extensive experience with the Dutch APA process and can draw on KPMG’s Global Transfer Pricing Services network if an APA in another country is required. If you wish to obtain certainty in advance through a BAPA, our experience and extensive network guarantees a smooth process.
