Transfer Pricing

“Transfer pricing” refers to the pricing of transactions between members of a multinational group involving products, services, intellectual property and funding.

In the global economy, transfer pricing is a key tax issue for multinational companies. It is an important driver of shareholder value, providing an opportunity to optimise the value of a business by effective tax rate and imputation credit management.

Managing transfer pricing risk remains critical in an increasingly aggressive environment. New Zealand’s Inland Revenue continues to focus on transfer pricing and is currently considering adjustments which, in aggregate, amount to hundreds of millions of dollars. Taxpayers will continue to face regular investigations as transfer pricing is included as an integral component of Inland Revenue risk reviews and audits.

How we can help you

We will work with you to identify and implement practical and defensible transfer pricing strategies that are in line with your organisation's international corporate tax planning objectives and value creation strategies.

Our team is able to draw upon global networks to offer you access to specialist knowledge and leading edge tools and solutions relevant to your industry in:

Business transformation planning

Competitive pressures, technological advances, new trade agreements and the opening up of new economies are just some of the issues facing business today. In this environment, more and more multinational groups are seeking opportunities to realign their global operations to achieve commercial efficiencies and maximise tax opportunities, making transfer pricing an integral part of any business transformation.

Transfer pricing planning for business transformation focuses on opportunities to realign profit generating aspects of the business in a tax effective manner. This can enhance shareholder value by improving your:

  • effective rate of tax
  • ability to recognise and/or utilise tax losses
  • generation of imputation credits for shareholders.

Compliance and document management

Effectively and efficiently documenting and bench marking intra-group transfer pricing policies and practices is vital if you want to protect your group from revenue authority scrutiny and potential adjustments and penalties. There is a move towards simplifying the collation of data and ensuring greater efficiency in the preparation of supporting transfer pricing documentation. We have strategies to assist you to simplify your compliance and document management.

Audit defence strategies

With more large businesses subjected to transfer pricing audits, it is essential to develop a sophisticated and tailored audit defence strategy. Our team has the experience and tools to assist you. We are also able to help position you to reduce the risk of an audit.

The audit defence strategies include the effective use of Advance Pricing Arrangements (APAs), often used to resolve disputes with Inland Revenue and/or as a preventative approach where audit risk may otherwise create uncertainties. By using APAs and developing an audit defence strategy, we can help you achieve greater certainty about transfer pricing, deliver cost savings in transfer pricing audit defence disputes and litigation and embed a cost effective defence in potential audit situations.

We can also help you in a transfer pricing context by:

  • Undertaking diagnostic reviews of your transfer pricing policies to identify risk management strategies and potential savings opportunities
  • Signing-off on transfer pricing aspects of due diligences.