Transfer pricing, valuation for tax purposes

In light of the escalating significance of transactions among affiliated companies within multinational conglomerates, there is an increasing necessity for precise transfer pricing. The relationships between associated parties are progressively coming under the scrutiny and evaluation of national tax authorities, especially regarding their impact on the income tax base. Consequently, well-established and meticulously documented transfer prices can provide you, the client, with a strategic advantage in the event of a tax audit and aid in negotiations with tax authorities.

In the area of transfer pricing, we will be happy to provide you with the following services, in cooperation with tax advisors:

  • Input analysis of the transactions with related entities.
  • Processing of proposals for new transfer pricing strategies within groups of related entities.
  • Preparation and processing of complete transfer pricing documentations.
  • Conducting a comparative analysis.
  • Assessments regarding the transfer pricing setup, or the arm’s-length range.
  • Review and assessments of current price setting.
  • The issue of applications for a binding assessment of transfer prices by tax authorities.
  • Support in negotiations or representing the client in dealing with tax authorities.

Our primary focus is on preparing comprehensive transfer pricing documentation, the determination of normal market levels of profitability for the provision of services and products, setting royalties for the sharing of intangible assets within the group (trademarks, software) and and determining the interest rates for intra-group financing.

Reasons to choose RSM CZ

  • We have a team of tax specialists and valuation experts who deal with the issue of transfer pricing.
  • We use a number of commercial databases for this purpose, especially TP Catalyst, RoyaltyRange and S&P Capital IQ.
  • We have extensive experience with this issue and thanks to the fact that we are a member of RSM global network, we are able to provide our services in an international context, in cooperation with our partners from other countries. Among other things, we are happy to arrange the preparation of transfer pricing documentation and studies in Slovakia in cooperation with our partner company RSM SK.
  • The expertise aspect plays an absolutely key role in the setup of and/or support for transfer pricing. The specialists from our Valuation Office involved in the transfer pricing setup use their long experience gained in processing hundreds of valuations of various types of assets.

Why we solve transfer pricing

Tax regulations stipulate that transfer pricing must adhere to the arm’s-length principle, that is, prices that align with those which would be negotiated between independent entities under standard business conditions. Breaching this principle could result in additional tax liabilities, inclusive of interest and penalties. While the formulation of transfer pricing documentation is not currently obligatory in the Czech Republic, each taxpayer is required to validate the facts presented in their tax declarations and submissions. The frequency of transfer pricing audits in the Czech Republic is steadily increasing and is undeniably a focal point for the Czech tax administration.

Typical transactions between related entities encompass, for instance, the sale of intermediate or finished products, the provision of management and marketing services, rights to utilise intangible assets (such as licences), the sale or leasing of tangible or intangible property, the furnishing of financial resources within a group of related entities, the provision of guarantees, and other forms of securities, among others.

Your contact person

Martina Nekvindová

Manager – Transfer Pricing