Transfer Pricing

The complexity of tax policies and the increasing number of guidelines being issued have made tax conformity a central issue for business leaders. Transfer pricing refers to pricing arrangements between related parties, often involving transfers of tangible and intangible property. International organisations like the EU and the OECD have taken several initiatives in respect of issues regarding cross border transactions between related parties.

Although Malta does not have specific Transfer Pricing legislation, the issue cannot be overlooked by persons operating in or with Malta. Malta’s double tax treaties follow the OECD Model Tax Convention which provides the basis of the Arm’s Length Principle.

At Seed we tackle Transfer Pricing projects not solely from a Tax perspective, but also from an Economic and Legal perspective.

A transfer pricing engagement typically involves determining the transfer price in accordance with the Arm’s Length Principle, that is the price that would have been agreed between third parties, for a given transaction, under similar economic circumstances. Having an expert who can map the economic circumstances and conduct the relative market research to determine the transfer price is key.

Following the determination of the transfer price, our tax experts would ensure that the transfer pricing documentation is in line with the OECD Guidelines, assist with the drafting of the related party arm’s length agreements and with any reporting that may be requested by the Tax Authorities.

Our approach is to design a transfer pricing system which is consistent with the way the business operates and the system we design follows its dynamics.

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Feel free to get in touch should you want to speak to us or have any particular enquiries. We’re here to help.
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