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Andrew Cousins, Director in Duff & Phelps' European Transfer Pricing practice, provides perspectives on the principles and implications to how a growing entrepreneurial business complies with the transfer pricing rules in Taxation Magazine’s issue on growing globalization.
We live in a world of increasing globalization. And as businesses expand beyond national boundaries they are likely to fall, sooner or later, within the compliance net of the transfer pricing regulations in the countries where they operate. But several questions need to be considered. At what stage does transfer pricing become a matter of concern for a growing business? In what way should it approach intra-group pricing and address its compliance requirements? How can certainty be obtained from tax administrations over the acceptability of the pricing? What kind of documentation should be kept? This article seeks to address the transfer pricing issues encountered by the growing entrepreneurial business as it makes its first forays overseas.