Transfer pricing is an important tax and management topic for international companies. Tax and transfer pricing regulations play a central role when multinational companies apply their intra-group pricing arrangements on a global basis. Increasingly extensive documentation requirements, additional transparency and stricter penalties demand a regular review of the transfer pricing policies of multinational companies. Following the Base Erosion and Profit Shifting (BEPS) project, the OECD and G20 countries are currently working on models for the taxation of the digitalised economy and for a global effective minimum taxation.
A tailormade transfer pricing strategy and its successful implementation in compliance with the arm's length principle is therefore a must for international companies with cross-border activities, for example if:
“With our services we can support you in developing and implementing sustainable and efficient transfer pricing models based on the specific business requirements of your company.”
Digitization and operationalization of transfer pricing models cannot be solved by the isolated use of technology solutions alone. According to a study by PwC, this is where around 70 percent of all digital transformations fail. That is why our consulting approach is based on a triad of human, process-oriented, and technological perspectives. This enables us to implement successful transformation projects by integrating existing processes and the affected employees holistically.
We advise you regardless of whether you are dealing with transfer prices for specific industries, goods, services or financial transactions.
In addition to our experts in Germany, we have a broad and experienced network of over 3,000 transfer pricing specialists in more than 90 countries.
According to a study by PwC, 70 percent of all digital transformations fail due to the isolated use of technology solutions.
We ensure that your transfer pricing model is aligned with the value chain of the group and other operational aspects of your business. The basis is a detailed analysis of your international value chain contributions. The result is the definition of efficient measures to reduce your potential tax risks.
We offer companies modern dashboard solutions that enable interactive and dynamic analysis of the value chain contributions, taking into account the functional and risk profiles as well as the tangible and intangible assets used by the individual companies.
Our services include the development of transfer pricing strategies according to the arm's length principle.
Our experience in strategic transfer pricing consulting and the associated expertise in identifying, analyzing, and evaluating functional and technical requirements as well as implementation potentials enables us to develop transfer pricing systems suitable for practical use. To this end, we rely, among other things, on modern business intelligence solutions that allow us to perform financial data-based market and industry analyses.
We work with you to develop a transfer pricing model that is best aligned with your company. Our consulting approach ensures a successful implementation of the transfer pricing model. The creation of a transfer pricing guideline completes this step.
In addition to our technical expertise, we bring to TP planning and design our in-depth knowledge of data analysis for objective and interactive modeling, visualization, and evaluation of transfer pricing design options. With dynamic simulations, we can interactively simulate the effects of different transfer pricing models with a variety of scenarios.
We support you in transferring the transfer pricing guideline into operational use and work with you to create a practitioner's guide to processes, organization, and IT. We provide "end-to-end" advice and thus also assist you in developing processes, responsibilities, and controls as part of a tax compliance management system.
Together with you, we analyze your existing IT landscape and optimize it concerning tax requirements. Among other things, we support you in developing and improving TP-relevant data flows, e.g., by harmonizing the ERP landscape, optimizing interfaces to other relevant systems, or developing so-called TP Data Lakes to map a coordinated TP data strategy.
We help with the system-based implementation of the transfer pricing model, from setting transfer prices to margin monitoring and, if necessary, correcting the transfer price.
Various software solution providers have established themselves on the market to support the operational implementation of transfer pricing systems, which, among other things, fully or partially automate the setting of prices, price monitoring, or processing of TP adjustments. The spectrum of solutions offered ranges from "ready-made" but adaptable tools to individually configurable platforms or solutions embedded directly in the ERP system. According to the cross-functional requirements of companies for TP setting and TP monitoring, the available technological approaches differ significantly in their complexity. We are happy to advise you on the selection of TP tools from external providers and support you during the subsequent implementation. In addition, PwC offers you a range of proprietary developments for transfer pricing and monitoring, e.g., solutions for automating service accounting or dashboards for margin monitoring.
We support your company with a globally coordinated, transparent, and efficient approach to documenting intercompany transactions. This approach to transfer pricing documentation helps you meet global and local tax requirements and avoid risks.
We combine classic transfer pricing documentation services with process and automation expertise.
In doing so, we apply a globally coordinated, modular documentation approach that is managed by the PwC Center of Excellence in Germany. This ensures effective, consistent, compliant, and therefore high-quality documentation that balances local and central requirements. Our approach is lean and pragmatic ("as much as necessary, rather than as much as possible"). Our best-in-class technology enables a highly efficient global TP documentation process. This includes our documentation software globalDoc Solution, the PwC Engagement Center as a collaboration platform, and TP Data Hub for automated data validations.
In addition to creating transfer pricing documentation in accordance with the OECD's Master File and Local File concept, there is the additional question of how you and your company can effectively manage compliance and transparency requirements with respect to County-by-Country-Reporting (CbCR). In Germany, companies are required by tax law to submit a country-by-country report, the so-called CbCR, to the German Federal Central Tax Office (BZSt) in XML format if they qualify as reportable enterprises as defined in Section 138a (1) of the German Fiscal Code (AO). In addition to other criteria, companies are considered to be subject to reporting requirements if their consolidated sales revenues reported in the consolidated financial statements amounted to at least 750 million euros in the previous fiscal year. In addition, the so-called Public CbCR is also becoming increasingly important at the EU level and as part of sustainability reporting following GRI Standards 207.
We offer you an effective solution for this. We validate and convert your country-by-country report data and support you during the entire process of data compilation and aggregation as well as during the analysis of the data within the scope of a CbCR Risk Assessment.
Tax authorities are attacking your transfer pricing setup, or would you like to obtain legal certainty in advance regarding your planned transfer pricing model? We support you and your company in tax audits, Advance Pricing Agreements (APAs), joint audits, mutual agreement procedures, arbitration, and tax court proceedings. You benefit from our many years of experience in tax controversy and dispute resolution, especially in cooperation with the Bundeszentralamt für Steuern as the German competent authority.
The requirements of the tax authorities concerning data held and its evaluation have increased noticeably over the last few years. With our technology solutions, we not only support you in the ad-hoc provision and preparation of requested data but also evaluate it proactively together with you to be prepared for tax audit inquiries. Using a variety of data analysis and visualization solutions, we are also able to create a sound basis for discussion in tax audits and interactively and dynamically display the effects of scenarios discussed in tax audits.
We have developed digital solutions that help companies automate processes or "translate" between tax, IT, and controlling. In doing so, we work with reliable partners. Our modern technology solutions help you comply with transfer pricing regulations and also add real value in terms of risk assessment and transfer pricing management.
Digital transformation can only be successful if processes, technologies, and people are considered holistically. This also applies to the operationalization and digitization of transfer pricing.
To provide you with comprehensive and targeted support for your transformation, we will be happy to advise you on the selection of tool solutions available on the market, on the development of new, individual technology and data & analytics solutions, and the implementation of the applications.
Transformations require an agile and iterative approach to meet the cross-functional requirements of the TP function and thus be successful in the long term. As a first step, we, therefore, define the initial project goals with you and coordinate them with all relevant stakeholders. Subsequently, the existing as-is processes should be reviewed in detail to understand the motivation on the tax, accounting, and controlling sides. The review process furthermore allows for analyzing the systems and tools used, the associated data flow, and, if necessary, recording planned adjustments and identifying challenges and pain points in the current process. After completing this step, the initial goals can be validated again and, if necessary, revised based on the findings from the analysis of the actual process. Finally, we work with you to develop a project approach for realizing the defined project goals and implement this together with you as part of the implementation of the selected technology solution.
Throughout the entire process, the employees involved or those who will be operationally responsible in the future should be integrated and receive detailed training on the new processes and systems by the end of the implementation phase at the latest. This allows being able to incorporate possible feedback from colleagues into the new process and ensure the transition from the old system or process is as seamless as possible. We are happy to support you in the targeted digital upskilling of your employees, for example, in the area of data analysis and visualization through the PwC Data & Analytics Academy.
Would you like to test our dynamic and interactive data & analytics solutions? Contact us here for free access to our PwC D&A Store, where you can try a selection of our dashboards with dummy data.