Managing a business is no easy matter nowadays. You have to comply with a diverse range of legal and regulatory requirements, often involving many different people within your organisation.
Overview and efficiency
For the person responsible for a company's tax affairs, there are many tax challenges. You are overloaded with information, developments are ever faster and the consequences of non-compliance with tax obligations are ever more serious. Above all, you need an overview and a way of tackling the challenges efficiently. After all, not only do you want to fill in the right forms on time, you also want to be able to devote time and attention to optimising your tax affairs. In short, you need to have a grip on the fiscal process.
Fiscal year calendar
Together with you, we develop a clear and transparent process to manage your tax affairs. This insight is provided by drawing up a tax annual calendar in which the important milestones are set out. This calendar serves as a guide for regular consultations in which we discuss the progress, any problems and new developments. By properly planning the routine tax matters, space and time are created within the company to take a closer look at your tax strategy. In practice, it often turns out that there are still opportunities for tax savings.
As enterprise with foreign branches and subsidiaries, you are increasingly confronted with the requirements in the field of ‘transfer pricing’ i.e. the pricing of cross border delivery of services and goods within the group. The main purpose of local tax authorities is to determine whether the intercompany transactions are agreed on at-arm’s-length conditions, meaning at the same price level and conditions as would be agreed between unrelated parties. By reviewing the pricing of your intercompany transactions, the tax authorities try to verify whether the reported taxable results in each country are reasonable and that the contracting parties are no artificially shifting profits to a favourable country.
Much attention in the press but also from the tax authorities
In recent years, large companies such as Starbucks and Apple have often been in the news for their use of tax-saving schemes. These companies neatly adhere to the legal rules, but the outcome for the treasury is not perceived as reasonable by everyone. In an attempt to increase the tax revenue of multinationals, the tax laws and rules are changing more and more finely as a result. For internationally operating companies, it is therefore even more important to have a good overview of the transfer pricing issues. The question is not so much "if" the tax authorities will ask questions about this, but "when".
Specific situations deserve special attention
In addition to ordinary business activities and transactions, we experience that local tax authorities are eager to assess the at-arm’s-length nature of the following transactions:
Continuous losses raise questions
A discussion with the tax authorities on transfer pricing can also arise if there are structurally loss-making activities (would an independent company not stop long ago?) and strong profit fluctuations (do such fluctuations fit with the nature of the business of that business unit?).
Your answer ready in the desk drawer
Because of the great importance (and also the attention of the tax authorities during an audit), most internationally operating companies choose to properly record the way in which the mutual prices are calculated. Since one can argue about 'businesslikeness', many entrepreneurs also choose to compare ('benchmark') their pricing with the outside world by using a transfer pricing database. This database contains millions of companies that carry out similar transactions. This is therefore an important test for the entrepreneur to check whether the profit margin on transactions could possibly lead to discussion with the tax authorities in the future.
From strategy to documentation
We can assist you in preparing your transfer pricing strategy and documentation. We have extensive experience with most countries and can, for example, assist you in obtaining a ruling from the tax authorities. Furthermore, transfer pricing can also be used to reduce your global effective tax rate. We would be pleased to provide you with more detailed insight into our services during an informal meeting.
Attitudes are also changing within the Dutch Tax Revenue. 'Horizontal Monitoring' is in. 'Mutual trust' and 'transparency' are important key words in this concept of monitoring by the tax authorities. But be careful not to betray that trust.
With 'horizontal monitoring', the tax authorities examine your internal organisation and processes as well as how they are controlled. Is the company 'in control' of the business processes that are relevant to tax matters?
How will you respond to this trend? Fisconti can help you identify the advantages and disadvantages of horizontal monitoring, and together we can examine whether this form of monitoring by the tax authorities is suitable for you.
Our Experts in Transfer Pricing.
The latest news on Transfer Pricing
In order to increase the competitiveness of the Dutch corporate tax system, the Dutch Ministry of Finance has introduced draft legislation that will result in the abolishment of Dutch dividend withholding tax in more cases.
Fisconti Tax Consulting
President Kennedylaan 19
2517 JK The Hague
+31 (0)70 365 66 17
The Netherlands
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