Transfer Pricing as a Management Tool

While Transfer Pricing Reporting is critical from a Regular Tax Compliance standpoint, it also has a significant impact on the organizations' operations and financial position.

Many multinational companies see the transfer pricing report as a tax compliance component, insofar as it aims to explain as well as serve as a basis for mediating transactions with related entities that have related transactions with each other for a given fiscal year.

Thus, serving as a burden of proof regarding the information presented in the annual financial statements to the Tax Authorities.

As a result, transfer pricing has tended to be treated as an afterthought by top managers, which can have significant consequences in the operationalization of transactions, as well as financial impact, since it is subject to corporate income tax corrections.

It is our understanding that, far beyond ensuring that the transfer pricing report fulfills its tax requirement purpose and highlights the arm's length principle, it should be looked at from a business planning perspective.

Likewise, it is important that companies ensure regular monitoring of transfer pricing procedures and policies so that they can be managed efficiently throughout each period.

It is in this context that, the RSM Mozambique Transfer Pricing team, is dedicated to this topic so that it can be included in the corporate planning effectively.

Aloísio Costa

Tax and Transfer Pricing Consultant

If you want to know more, please send us an e-mail to [email protected].

Author(s)

Aloísio Costa
Tax Consultant

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