Transfer pricing relates to the price non-arm’s length entities located in different jurisdictions charge each other for goods and services. The tax rules related to transfer pricing are complex and governments are increasingly proactive in scrutinising transfer pricing policies and practices. Government audits of transfer pricing activities can be time-consuming and stressful, and the penalties for running afoul of transfer pricing rules can be significant.
Countries all over the world are applying greater scrutiny – and calling for stricter regulations – on transfer pricing practices. However, this greater scrutiny can provide an opportunity to identify more cost-effective arrangements for your international transactions.
In Thailand, all companies need to make sure that their related party pricing is arm’s length and is supported by good quality transfer pricing documentation. Failure to have adequate transfer pricing documentation can result in high tax penalties in the event of a tax audit.
At a global level, there has been a rapid introduction of new transfer pricing regulations from the Organisation for Economic Cooperation and Development (OECD), particularly on intellectual property as part of their Base Erosion and Profit Shifting Initiative (BEPS). This will have a substantial impact on current and future transfer pricing structures for all sizes of business.
HLB helps groups navigate this fast-changing transfer pricing environment. Aided by dedicated transfer pricing practitioners around the HLB network, we provide a range of planning, compliance, audit defence and benchmarking services. We can work with you to develop transfer pricing policies that are defensible, flexible and in line with your overall tax planning strategies.
Our Transfer Pricing team can help you with:
- Preparing transfer pricing documents.
- Working holistically to understand the future strategy of your business and to design an optimal transfer pricing structure based on their value chain and the location of key operational personnel/assets/risks in the business.
- Assisting to respond to a tax review/audit including strategy advice, drafting letters and meeting with the tax authorities
- Obtaining an Advance Pricing Agreement (APA) where clients would like certainty on transfer pricing matters.
Latest Insights from HLB Thailand
The Thailand correspondent for the prestigious International Tax Review
Libor ends in 2021 - Have you considered the impact on your transfer pricing?
In our latest article for International Tax Review, Andrew Jackomos and Rohit Sharma discuss the end of LIBOR, its impact on transfer pricing and the issues requiring immediate attention for a smoother transition into the post-LIBOR era.
As the hospitality industry struggles, taxes are knocking on the door
One of the long-term effects of the pandemic – besides the business effects that vary between different activities in the hospitality industry – are the tax consequences that result from...
OECD Guidelines for Transfer Pricing during the COVID-19 Pandemic in Thailand
Taxpayers and tax administrators around the world are grappling with the unprecedented impact the COVID-19 pandemic is having on transfer pricing arrangements. On 18 December 2020, the OECD published the...