Do you have control over Transfer Pricing?

1. Does the group have updated TP guidelines or an agreed TP policy? There should be written TP guidelines for all controlled transactions to ensure that they are carried out on arm's length terms. This applies in particular to the pricing of purchases and sales of goods, payments for services, royalties and licenses, as well as interest on loans, receivables and balances.
2. Is the TP policy correctly implemented? Many companies have not implemented the TP policy correctly. Often the TP policy is implemented differently from year to year. This can cause challenges in connection with a book audit. What will the tax authorities use as a basis; what has been adopted or the guidelines that have been implemented?

3. Restructuring during the year. Events such as changes in the legal structure, ownership structure or transfer of assets (especially sale of intellectual property rights) between group companies should be considered separately.
4. TP adjustments of profit and/or mark-up? If the group is considering making TP adjustments to group companies in connection with the year-end closing (e.g. adjustment of profit for production companies, sales companies, mark-up on service companies or interest rate on loans), this should be done with reference to a TP guideline and a benchmark study. 

5. Group companies with losses? If the Group has companies with losses in Norway or abroad, it should be assessed whether this is in accordance with the Group's TP guidelines. Inconsistencies between actual operations and the guidelines, or a lack of explanation for the loss, can present challenges in connection with book audits.
6. Delivery of services without payment? A service must always be matched by a counter-performance. For example, the provision of administrative services from the Group's headquarters to subsidiaries should always be invoiced.
7. Surety or guarantee without payment? In principle, a surety or guarantee to an external party (e.g. a bank) on behalf of a group company should always be invoiced.
8. Balances without interest? In principle, interest must always be calculated on intra-group balances.
9. Intercompany interest? Is interest on intercompany loans based on market terms, for example with reference to external interest rates or an interest rate benchmark?

10. Offsetting. Offsetting of receivables between group companies should be made on the payment, not on the calculation.

Feel free to contact us for a possible meeting to discuss the transfer pricing guidelines in the group. We can also assist in reviewing, updating and quality assuring the group's guidelines.