One of the most common ways to maximize profit potential and take advantage of tax credits is through transfer pricing studies.
But what exactly is a transfer pricing study?
Understanding Transfer Pricing Studies
When an international company works with a foreign business, goods, services and other merchandising is often transferred between the two corporations.
Most international corporations are subject to different tax brackets in accordance with tax regulations in their originating and hosting countries.
Examples items subject to transfer pricing:
- tangible goods and services sales
- intangible goods such as brands and trademarks
- leased property and equipment
- services rendered
- loans and advances
A transfer price study is typically performed by experienced and educated international tax consultants. Professional consultants review all of the transactions between related companies.
Through the use of comparable companies and arms length pricing, it can be determined if the maximum tax incentives have been utilized.
Transfer price studies also provide documentation in the case an audit is performed. This can be especially useful for countries with new markets and little guidelines for transfer pricing protocols.
What areas does a transfer price study include?
Because every international company has its own dynamics, and some countries have little or no transfer pricing regulations, every transfer pricing study has to be performed case-by-case.
However, there a few basic areas transfer price studies generally review:
- Current documentation
- Existing intercompany transactions
- Totalization agreements
- Documentation requirements for host and originating country
- Application of tax reductions and credits
- Current tax regulations
Flat rates and world-class service
Transfer pricing studies can be complex and should always be conducted by experienced accountants and economists. PIASCIK professional consultants can ensure your transfer pricing makes the most of available tax incentives.
PIASCIK has clients in 49 countries with over 70 years of combined international tax experience. Members of PIASCIK include the President of the Virginia International Business Council and the Treasure for the Society of International Business Fellow. PIASCIK has also been a program partner with all of Virginia's outbound and inbound international programs for the last five years.
PIASCIK is a specialized boutique tax firm that provides a economical alternative to expensive transfer price studies performed by large national accounting firms. PIASCIK is also recognized as an industry expert in expatriate taxation, IC-DISC and FBAR filings. Our highly educated consultants know every venue of international tax laws that affect you and your company. Don't be just another number for an international tax firm.
PIASCIK offers flat rates with no hidden charges or agenda. We even offer the initial consultation FREE. Contact PIASCIK today and discover how committed we are to providing world-class service with real world results.
