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If your company works with group divisions in various countries, and you want to prevent extensive discussions with various Tax Departments on the distribution of profit, transfer pricing is key. A proper transfer pricing system can save you a significant amount of money, while conversely, a bad transfer pricing system may cost a significant amount of money. Bol International is pleased to assist in realising the most beneficial transfer pricing system.
Transfer pricing is determining the price of transactions within group companies. The key theme is: how to distribute the profit to the various countries / subsidiaries? Logically, you would prefer to distribute most profit to the country with the lowest tax rate. However, the tax authorities will require a proper substantiation in terms of business operations.
You will be asked for a motivation for using a certain transfer pricing method, and you are required to indicate why this leads to the optimal profit distribution on the various group divisions. The Tax Department will also want an insight into the activities and risks of the various group divisions and an explanation of the specific market conditions. All tax authorities naturally aim to secure the tax income of their own country. Primarily, you are required to provide evidence.
Bol International’s consultants are happy to assist you in preparing a transfer pricing policy and a successful implementation. Thanks to our close collaboration with foreign partner offices, we can make use of local transfer pricing expertise. As a result, you pay a minimum of tax and the tax authorities will be satisfied.
Bol International reviews your situation for all countries, looking for a shared approach based on the so-called OECD Transfer Pricing guidelines. With its foreign partners, Bol has been successful for many companies.
Please note that all countries require separate documents. In most countries, documents in English are acceptable, but unfortunately not in all.
Actually, it is also important to accurately chart activities and prices even for domestic group companies. The transfer pricing regulations are applicable to both domestic and international transactions.
Not in all cases. Depending on the nature and activities of your company, you may demonstrate the business reasoning behind the transactions and prices in different ways. Substantiation of the business case also depends on the settlement pricing method applied.