Transfer pricing policy

Why is it worth having one?

The transfer pricing policy is a document that outlines the principles governing transactions between entities within a capital group.

Although not legally required, having a transfer pricing policy simplifies transaction management by determining and verifying transfer prices. It also reduces tax risks associated with potential challenges by authorities regarding the principles or amount of the transfer price.

A transfer pricing policy provides:

A structured approach to managing intra-group transactions

Guidance to related parties on pricing methodologies

A transparent and comprehensive framework for controlled transactions

A safeguard for group entities

Benefits of having a transfer pricing policy

  • maintaining consistent methods for calculating and verifying transfer prices
  • streamlining decision-making processes regarding remuneration principles in intra-group transactions
  • reducing the time-consuming preparation of reports and tax documentation
  • ensuring compliance with country-specific tax regulations and marketability of future transactions
  • providing easy access to comparative analysis results
  • optimising the overall tax burden at the group level

When is it particularly worthwhile to prepare a transfer pricing policy?

It is particularly beneficial when there are or will be many similar transactions within the group. Such recurring transactions may include:

  • sale of goods
  • provision of services (e.g., management, marketing, IT services)
  • intra-group loans
  • granting of licenses
  • transfer of assets or benefits

For whom is a transfer pricing policy useful?

A formalised transfer pricing policy can particularly benefit:

  • the management of the group and its individual related parties
  • employees of the financial departments of companies
  • employees of the commercial departments of companies

it simplifies decision-making on the rules for future group transactions and compliance with transfer pricing reporting and documentation obligations.

How can we help?

We can verify the transfer pricing policy in force in the group. The audit includes:

  • verification of the pricing rules in terms of compliance with current regulations and good TP practices,
  • verification of consistency of pricing rules for all types of transactions,
  • identification of risks related to the current transfer pricing model in the group,
  • verification of the correctness and timeliness of transfer pricing analyses.

We can prepare a transfer pricing policy (for both planned and already implemented transactions within the group) according to your requirements. The scope of work may include:

  • establishing the methodology and price calculation method for the indicated intra-group transactions, particularly for:
    1. recurring transactions,
    2. the largest transactions by value,
    3. the most frequently controlled transactions (i.e., financial, intangible assets, services, commodity transactions),
    4. transactions for which transfer pricing adjustments are made.
  • preparation and/or updating of transfer pricing analyses indicating the market level of remuneration for individual transactions,
  • compilation and documentation of the rules established within the group for selected intra-group transactions.

We can update the transfer pricing policy according to your requirements. The scope of work may include:

  • determining the methodology and method of calculation of remuneration for new transactions (not included in the existing policy) along with preparation of transfer pricing analyses for these transactions,
  • updating transfer pricing analyses indicating the market level of remuneration for individual transactions included in the policy.

Feel free to contact us

Magdalena Marciniak

Partner | Tax adviser | Head of the Transfer Pricing Practice
T: (+48) 665 746 360

Agnieszka Walska

T: +48 797 603 696