If the Company engages in transactions subject to transfer pricing rules, even if it is not formally required to file the Local Report, it must verify whether the amount reported for such a transaction is at arm’s length, so that it can comply with the substantive requirement of the transfer pricing regulations. In this regard, having a technical study is essential to avoid subsequent adjustments that could result in a higher tax burden.
Our Market Range Study service includes the preparation of a technical study analyzing comparability ranges for price, interest rate, royalty rate, or profit margin in accordance with arm’s-length market conditions, as well as tax documentation, so that companies have a tool to conduct proper transfer pricing planning and agree on their consideration in compliance with the principle of free competition. To determine Market Value, various methodologies and technical guidelines on transfer pricing and valuation are used, as accepted by the rules and regulations imposed by the Tax Administration and the guidelines published by the Organization for Economic Cooperation and Development (OECD).
