Transaction Manager for Handling Transfer Pricing Challenge

Business Challenge

Companies that have representative offices in different countries often face various challenges. Among them, one of the most common is the transfer pricing problem. Transfer pricing is complex not only because of certain technical aspects but also because it involves taking into account and complying with all the requirements and reporting in more than one jurisdiction. Depending on the jurisdiction, such requirements can be radically different. So, the calculation and documentation preparation of cross-border transfer prices is a big scope of work for corporations. If transfer prices are not at arm’s length or if the appropriate documentation is insufficient, there can be significant tax risks. Among the consequences might be transfer pricing correction, tax & interest payment adjustments, and even significant fines.

That is why the software solution for handling the challenge of global transfer pricing was requested by the customer. The web application helps to comply with the main transfer pricing rules as well as to set up internal transfer pricing processes.

Solution

The development team successfully finished the project, providing the client the web app with a reliable Windows service for importing extensive transaction scope and a highly reliable DataBase. Among other important product features were:

• Efficient collection and management of Transfer Pricing relevant financial data
• Worldwide Transfer Pricing process management (responsibilities, deadlines, etc.)
• Effective monitoring and minimization of compliance risks
• Mainly automated Transfer Pricing documentation with central monitoring

Business Impact

The developed transfer pricing solution helps the customer to offer and provide the services more effectively. In general, this consulting firm offers assistance in designing and implementing of transfer pricing guidelines. In other words, the company implements individual solutions for multinational enterprises. Also, the consulting firm supports its clients by the optimization of all transfer pricing system aspects. Thanks to the software, the customer helps to plan, organize or optimize, and automate transfer pricing processes. The solution reduces risks and helps keep documentation and reports in full order and compliance with jurisdictions.

In short, the development of a transfer pricing solution enabled the customer following:

• The client has its unique software product that helps to handle transfer pricing challenges and create structured transfer pricing documentation
• The firm offers its services to multinational corporations; and helps in the planning, realization, and optimization of transfer pricing processes with an individual approach to each company
• The company continues to expand the circle of its customers