RSM Resources

Transfer pricing involves the terms and prices at which related parties sell (or should sell) goods or services to each other. When the parties are located in different taxing jurisdictions, opportunities exist for the movement of income to a lower-taxing jurisdiction. To combat potential losses of income tax revenue, more than 40 countries have adopted transfer pricing rules and requirements.

Some countries and states require the completion of transfer pricing documentation to support the taxpayer’s reporting position by comparing a company’s results to comparably situated unrelated parties. Such an analysis can help a company comply with the documentation requirements and enhance its tax planning. Whether transfer pricing documentation is needed or not, this analysis can uncover possible tax savings or justify price adjustments that may be planned for business reasons.

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