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Impact understands that Transfer Pricing can be complex, and staying informed is essential. This page answers common questions about regulations, compliance, and best practices. If you need further clarity, reach out for expert guidance.
Transfer Pricing Fundamentals
Transfer Pricing refers to the pricing of transactions between related entities within a multinational group. These transactions must align with the arm’s length principle to ensure fair taxation.
Proper Transfer Pricing compliance minimises tax risks, prevents double taxation, and ensures that multinational entities meet regulatory requirements in different jurisdictions.
The arm’s length principle states that intercompany transactions should be priced as if they were conducted between independent parties under market conditions.
Authorities such as SARS and the OECD review documentation, perform audits, and compare intercompany transactions to market benchmarks to ensure fair pricing.
Non-compliance can lead to tax adjustments, penalties, interest charges, and reputational risks for businesses. Proper documentation is key to avoiding disputes.
Impact provides tailored support, including risk assessments, policy setting, benchmarking studies, and assistance with dispute resolution to ensure full compliance.
Transfer Pricing Compliance & Documentation
The Base Erosion and Profit Shifting (BEPS) project is an OECD initiative aimed at preventing profit shifting by multinational companies through enhanced Transfer Pricing regulations.
CbC reporting requires multinational entities to disclose financial and tax information for each jurisdiction in which they operate, ensuring transparency in global tax practices.
Transfer Pricing documentation is required when a company meets certain thresholds, such as the ZAR 100 million mandatory filing requirement in South Africa for cross-border transactions.
The OECD’s guidelines outline three tiers: the Master File (group-level overview), the Local File (transaction-specific details), and the Country-by-Country Report (global tax disclosures).
Documentation should be reviewed and updated annually to reflect any changes in business operations, regulations, or intercompany transactions.
A well-defined policy includes pricing methodologies, documentation procedures, compliance strategies, and risk management practices to align with regulatory expectations.
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Clear Answers to Key Transfer Pricing Concerns
Impact provides expert insights into Transfer Pricing regulations, filing requirements, and risk management. Whether you need clarity on OECD guidelines or SARS compliance, find answers here. If your question isn’t listed, contact Impact for personalised guidance.