Transfer Pricing Tips from KPMG

27 august 2018

KPMG experts share their tips on the transfer pricing.

Tip 1. Intra-Group Services

BEPS initiatives place major emphasis on pricing issues related to the provision of intra-group services. Under the key BEPS principle, the cost of intra-group services shall commensurate with the level of benefits received by recipient of those services (i.e. the customer).

So, how can you verify that your company applies this principle to intra-group transactions involving the purchase of services? First, you need to address the following questions:

  • A mark-up on the cost of services shall be within the arm’s length range.
  • Cost structure of the service provider should exclude the costs attributable to shareholder activities.
  • Costs incurred by the service provider shall be transparent and easy to calculate.
  • Allocation keys must be used on a reasonable and consistent basis for all allocations of overhead costs.
  • Services do not duplicate functions and activities performed by in-house departments of the customer.
  • Source documents shall be in place and duly completed.
  • Apply the benefits test to assure that the customer has the need for services.

Still have questions?

Please call KPMG Transfer Pricing Hotline

+7 771 781 8828

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