READY FOR A NEW WAVE OF TRANSFER PRICING AUDITS?
22 January 2014
Companies that are part of a group need to respect the arm’s length principle when pricing intra-group transactions. Transfer pricing is a highly specialist subject matter that usually only multinationals were dealing with. As the Belgian tax administration has broadened its transfer pricing expertise by also involving and training (regional) corporate tax inspectors, also SME’s are however more and more often confronted with transfer pricing.
Similar to last year, 250 to 300 companies (SME’s as well as multinationals) will receive a standard transfer pricing questionnaire by the end of this month. A transfer pricing audit can be very time consuming for those companies that are not well prepared and could raise their worldwide tax invoice. The questionnaires are lengthy and it is important to reply to the questions adequately from the start. There is always a possibility to ask for a pre-audit meeting with the tax inspectors, however, this is not an obligation. Preparing transfer pricing documentation proactively can of course avoid long discussions with the tax authorities.
Should you have any questions regarding this topic or require assistance, please feel free to contact the BDO Transfer Pricing Team: