Project Management support for Global Transfer Pricing Documentation and Advisory
Sector: Leisure and Entertainment
Why is it important?
The Group is one of the largest family-owned diversified businesses headquartered in the UAE and has operations in around 20 countries.
In the entire global TP documentation project, we played an important role of a Project Manager and the key tasks which we undertook were as below:
Our role was not limited to meeting compliance requirements but also bringing in consistency with which information was presented in the transfer pricing documentation viz. the Country by Country report, Master File and Local Files. While executing the engagement, we noticed differences in which information and transfer pricing policies were documented in the individual local files. We performed a detailed gap analysis, identified the inconsistencies and worked with various teams to have consistent documentation across jurisdiction and across various operating business units which were previously preparing the documents in isolation.
Considering domestic transactions were also covered within the ambit of transfer pricing in certain jurisdictions, we advised on the most appropriate transfer pricing benchmarking methodology considering that the transfer pricing exposure is minimised for all transacting parties within a jurisdiction in compliance with local laws.
Though our engagement was restricted to compliance, during the engagement we identified several areas of transfer pricing risks and highlighted this to the relevant client teams. We supported the client in identifying high risk areas in jurisdictions which did not have detailed transfer pricing regulations but where tax authorities were looking at related party transactions closely. The engagement involved liaising with multiple stakeholders, different teams from client and WTS network across jurisdictions, etc.
We monitored the transfer pricing developments in all the 20 countries and also shared relevant developments with the team proactively to ensure zero defaults and penalty exposure. We kept a close eye on the entire project plan and provided regular updates to the client to ensure that all compliance deadlines were met. This was possible because of our extensive network of WTS member and correspondent firms in over 100 countries.
Considering the subject of transfer pricing is relatively new and evolving in the Middle East, we undertook extensive trainings and organised workshops for various client teams to educate them and to help them maintain sufficient transfer pricing documentation in terms of policy documents, agreements, back-up workings to transfer prices, evidence of need and benefits from intra-group services etc. which would support the group in case of any transfer pricing audits.
Apart from undertaking documentation and meeting compliance requirements, we also assisted the Client in transfer pricing planning for their new business operations in UK and helped them develop the most suitable transfer pricing policy consistent with business objectives and also regulatory compliant.