Ella Hirvenkari
Establishing a Presence in Finland: Subsidiary vs. Branch
Transfer pricing
Transfer pricing as part of international business
Transfer pricing refers to the pricing of business transactions between companies within the same group, which are also known as controlled transactions. Even though the limits for a documentation obligation vary from one country to another, the requirement for adhering to the market price principle applies to all companies engaging in, or planning to engage in, international business. In this case, all business transactions, such as trade in goods and services, compensation for the use of immaterial property and internal financing, are assessed from a taxation point of view.
The business model and taxation approach must be aligned in order to allow for potential tax risks to be identified in time. This will make your operations tax-efficient. Together with our global partner network, we will make sure that our clients can focus on their transboundary business without additional concerns, unnecessary risks or unreasonable administrative burdens.
Take care of obligations with no worries or unnecessary risks
Transfer pricing has become significantly more important in today’s global economy, and globalization has made value chains for international companies more advanced and more complex from a taxation perspective. In order for your business to meet transfer pricing obligations, we will take care of the following:
Transfer pricing model
We will plan and implement a transfer pricing model that suits your business. During the planning stage, we will take into account your business and the latest regulatory changes in order to find a tax-efficient approach. A model that minimizes risks while maximizing benefits is implemented as part of the company’s daily operations.
Transfer pricing documentation
We draw up and update your transfer pricing documentation. The purpose of the documentation is to clarify the key factors related to transactions between group companies. It will demonstrate in writing that the conditions applicable to business transactions meet the requirements of the market price principle.
We will draw up the international guidelines and documentation pursuant to the local legislation (Master File and Local File). We will also help with the maintenance and annual updates of the documentation as well as defending the documentation in case of possible disputes.
Arm’s length analyses and database studies
For cross-border intra-group business transactions, ensuring compliance with the arm’s length principle requires validation based on independent comparable data and benchmarking studies.
The analyses and results can be utilized to support both the (advance) price setting and the (subsequent) validation of the arm’s length compliance.
Delivery and value chain analysis and optimization
Transfer pricing ultimately concerns analyzing contributions made by different group companies in relation to product or service specific, group-level delivery and value chains. Thus, working methods and analysis frameworks developed for arm’s length validation are especially suited for delivery and value chain analysis, as well as for broader business optimization purposes.
With the help of these analyses, we enable gaining deep understanding regarding the central aspects of efficiency and added value in business. Consequently, we can identify development and optimization targets and assess how they will possibly be affected by various alternative actions.
Advance procedures
Although the guidelines regarding transfer pricing and the arm’s length principle are governed on international level, their practical application is always based on national laws and interpretations. That is why there is always a certain amount of uncertainty involved in the taxation of a group engaged in cross-border business operations.
We help our customers by versatile utilization of different advance procedures including – in addition to proactive communication and traditional preliminary rulings – pre-emptive discussions (both domestic and Cross-Border Dialogue) and Advance Pricing Agreements (APA). When required, we assist in national appeal and litigation processes.
Local expertise is always at your disposal
We make sure that you are always using a suitable, efficient and purposeful internal approach that makes it easy to tend to your obligations. Our global network of partners covering more than 150 countries for local advice at your disposal.
In addition to individual assignments, we offer an efficient total outsourcing service (TP BackOffice) that relies on synergy benefits and gives you access to unlimited resources within the required scope. This collaboration carries a monthly charge, is predictable and covers all countries where the group operates.
Expertise in taxation and legal matters to support you
Our assistance will ensure that you can make informed decisions during throughout all the stages of your business. Regardless of whether you are dealing with an international or domestic situation, a business acquisition or restructuring or require personal advice, you will always have access to experienced experts who know the best tools for your situation.
Alder Global
Comprehensive support for growth and international business operations.
Alder Domestic
Practical legal and tax advisory for companies and enterprises operating in Finland.
Alder Transactions
Experience-based added value for transactions and other forms of restructuring.
Alder Private
Personal consultancy for business owners, entrepreneurs and other private individuals.
Get to know our knowledge areas
Cross-disciplinary versatility, proactive monitoring of the changes in the operating environment and continuous development of our skills enable us to provide added value to our clients.
Transfer pricing professionals
