Transfer pricing is receiving increased media attention and in recent years has become one of the most important themes in international tax law. It isn’t just a question for large multinationals: many SMEs and family entrepreneurs operating both within and outside our borders are also becoming increasingly aware of the importance of this issue. VGD's advisors will be happy to help you clarify the complexities of transfer pricing.
Transfer pricing explained
The Arm's Length Principle
Transfer pricing is based on the Arm’s Length Principle (ALP). This states that all transactions between affiliated companies must be carried out as if they were independent and therefore unrelated to each other. It is therefore appropriate to carry out benchmarking and comparative analysis to ensure your pricing reflects market conditions, taking account of the functions observec and the risks borne by the various companies.
Principle of territoriality
National governments and tax administrations are paying more and more attention to maintaining and controlling market conditions for transactions between associated companies since transfer pricing was introduced. More attention is definitely being paid to this in an international context, as incorrect pricing potentially means a loss of revenue for the tax administration.
Let's talk transfer pricing!
VGD’s specialists would be happy to sit around the table with you to help you understand this complex area and optimise your company’s handling of it.
- Quick-scan: identifying relevant points of attention and risks of your company and checking whether your company complies with (inter)national regulations and legislation.
- Assistance with documentation of transfer prices
- Guidance and advice on planning and compliance
- Practical implementation of your transfer pricing policy, both in Belgium and internationally.