Introduction to Operational Transfer Pricing

Data accuracy, consistency and quality play a critical role in managing Transfer Pricing related (TP) risks. Explore the key benefits of Operational Transfer Pricing and how it helps you to implement and streamline the Group Transfer Pricing policies effectively.

Background

Operational Transfer Pricing is the effective and efficient management of Transfer Pricing (TP) information, data and processes using technology to ensure the consistency and efficiency of TP policies across the entire MNE Group.

Why OTP

As every MNE Group has presence across several tax jurisdictions, with each jurisdiction having its own set of local TP compliance rules and regulations, it becomes important and imperative to ensure that there is a consistent, accurate and transparent flow of information and data amongst the transacting entities.

An OTP-based programme can help in aligning the TP requirements of each jurisdiction with the statutory requirements as well as streamlining with the commercial and business goals of the MNE Group, as a whole.

OTP process

A typical OTP process would generally include the following elements:

Key benefits of OTP

A well planned, structured and implemented OTP programme can result in the following key benefits for all kinds of MNE Groups:

Cost efficiency and savings
Effective risk management
Better process control mechanisms
Consistency and cohesiveness amongst all Group entities in terms of information sharing

How we can help

At Mazars, we have dedicated Transfer Pricing experts who can help you in analyzing your current TP processes and systems and suggesting the appropriate OTP programme related solutions with long-term benefits.

For further discussions, please contact the undersigned.