Cross-Border Audit: Transfer Prices

Transfer pricing refers to the value assigned to assets and liabilities transferred between parties within an organization, often in the context of business transactions or business restructuring. In tax audits, accurate assessment of transfer pricing is crucial to ensure compliance with applicable tax laws and the accuracy of financial statements.

Objectives:

1. To ensure that transfer prices stated in financial reports are accurate and comply with applicable tax regulations, thereby reducing the risk of conflicts with tax authorities.
2. To identify and assess the true value of assets and liabilities transferred between parties, including the evaluation of the legitimacy of transactions and the associated risks and benefits.
3. To provide clear and accurate information regarding transfer values in tax audits to management and shareholders.

Benefits:

1. Reducing the risk of conflicts with tax authorities and enhancing compliance with tax laws.
2. Providing accurate valuations of transferred assets and liabilities.
3. Increasing the trust of shareholders and stakeholders by delivering transparent and accurate financial reports.