Transfer Pricing Services

In today’s post BEPS world, we provide expertise and technology to help you navigate the changes, stay compliant and drive value from a TP perspective

Navigate the ever-changing transfer pricing landscape, manage risks and drive value.

Managing a multinational business in a post BEPS environment brings new transfer pricing (TP) challenges. Changing consumer preferences, the shift to digital, supply-chain constraints and geopolitical complexities push companies to constantly evolve their operating models, impacting their TP framework.

At the same time, companies face rising TP transparency requirements, as governments and tax authorities keep increasing compliance demands and intensifying their focus on TP audits more than ever before.

This results in additional pressure on business operations and can have adverse effects on financial results, cash position, and consequently, the wider group’s reputation.

KPMG Luxembourg TP practice is uniquely positioned to assist organizations manage these risks. Our team includes more than 30 specialists with diverse and extensive fields of expertise.

Our services span from design and TP planning, implementation, TP compliance, to certainty and controversy support.

In addition to this, as Luxembourg is a key hub for investment management, we offer tailored solutions covering the entire investment lifecycle, from the inception and maintenance to divestment and recovery.

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Sophie Boulanger

Partner, Head of Transfer Pricing

KPMG in Luxembourg

+352 22 51 51 5423

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How we can help

Design and TP Planning
Implementation
TP Compliance
Certainty and controversy

Design & TP Planning

Companies are under growing pressure to be more transparent about their global operations and where they pay taxes. As a result, businesses must improve their communication with stakeholders regarding their business models, tax and TP policies. More than ever before, this requires the capacity to comprehend and effectively illustrate the business realities and their alignment with profit and tax outcomes.

Thoughtfully designed and effectively implemented TP policies are essential to good business conduct. Through years of experience in assessing and analyzing multinational tax and TP risks, we can assist with the planning, design and implementation of sustainable TP policies.

Given the ever-growing need for companies to have a coherent and holistic view of their business, which articulates how and where value is created, our team specializes in analyzing business value chains. A value chain analysis can be an important tool in demonstrating, to both internal and external stakeholders, that the location of a company’s taxable profits is consistent with the substance in that respective location.

Implementation

For a company with cross-border intragroup transactions, TP policies create accounting, legal and operational challenges that are specific to their business. As businesses change, they face increasing demands from governments worldwide, and they will require an operational transfer pricing (OTP) strategy which will ensure data integrity, efficient integration with other key functional areas, and provide reporting transparency into the implementation of TP policy.

By analyzing specific group attributes and the wider industry landscape, our team selects the most appropriate solution from the range of approaches, tools and technologies available in order to design and solve specific TP policy implementation needs. The results include an improvement in the integrity of intragroup processes, increased operational efficiency and reduced risks.

TP Compliance

Multinational companies operating in Luxembourg need to demonstrate that their intragroup transactions are compliant with the arm’s length principle.

Our team provides expertise across various stages of TP documentation preparation, including economic (benchmark) analyses to identify the arm’s length range of remuneration for specific inter-company transactions, assessments of cash and debt sustainability, drafting TP documentation for back-to-back financing structures in Luxembourg, and providing up-to-fully managed solutions such as outsourcing global TP documentation in line with OECD Guidelines and local requirements, including master files and local files for the entire Group.

Furthermore, we have dedicated solutions in respect to country-by-country (CbC) reporting and related risk assessments, along with notification obligations.

Certainty and Controversy

In a world of uncertainty, advance pricing agreements with tax authorities provide a much-needed comfort and relief from expensive and time-consuming tax audits. We draw on our substantial experience assisting companies obtain Advance Pricing Agreements (APA), to support your business in developing bespoke strategies and processes for APA applications, including various interactions with tax authorities to facilitate a favorable outcome.

However, increased scrutiny towards TP globally and in Luxembourg leads to more challenges for transfer pricing policies applied by multinational groups.

Working together with our tax dispute resolution team, we provide a wide range of services, from stress-testing companies by conducting mock-TP audit procedures, to assisting in all stages of TP disputes, audits, court proceedings, mutual agreement procedures and exchanges of information.