The aim of undertaking a transfer pricing risk assessment is to identify transfer pricing exposures embedded within businesses to allow the management to ensure that they are compliant and if not to address any non compliance before tax authorities commence formal investigation procedures.
The core objective of any transfer pricing risk assessment process is getting answers to a few fundamental questions. It is therefore essential to have a clear understanding of the questions to be answered before the assessment is performed. Below are some typical questions which may be asked during assessment:
- Are there material controlled transactions?
- Is there an indication of transfer pricing risk?
- Is the case worth an audit?
- What specific issues need to be addressed during the audit?
Duff & Phelps can assist by undertaking a risk assessment based on the OECD framework which identifies a number of risk factors that it associates with an entity bearing a significant transfer pricing tax risk.
Our transfer pricing assessment will identify and score the transfer pricing risks borne by the business and make recommendations where necessary to mitigate these risks. Following the assessment the business will be in a position of power to facilitate suitable action to counter any current and/or historic risks and plan for the future.