Embracing Tranfer Pricing Accounting and Compliance

With digitization and globalization of economy, companies operate from multiple jurisdiction and often have the cross-border trade with group entities. Globalization has hauled the structure of the business transaction such as Intercompany sales, Stock transfer, royalty benefits, group services etc. It provides both enormous opportunities and significant compliances challenges. It enables the company to look for the opportunities to increase the business by taking advantages of country specific benefits such as lower cost wages, availability of natural resources, subsidies, skilled talents etc. On the other hand, the risk with respect to compliances as such benefit comes at the cost of laws and regulations which require special accounting and reporting of such intercompany transactions under each geography. Additionally, intercompany transaction face rigorous scrutiny from the Auditor/Regulator. Once such regulation is Transfer Pricing.