Transfer Pricing Services

Transfer pricing presents significant risks and opportunities for multinational groups.

As the global landscape evolves, tax authorities are seeking to prevent base erosion, impacting multinationals of all sizes and in all sectors. Risks arise where a failure to prepare renders insufficient evidence of compliance, whilst alignment of commercial tax strategy creates opportunities for efficiency and transparency.

In many jurisdictions, including New Zealand and our major trading partners’, tax authority scrutiny is leaving no stone unturned. Intangibles, financing, business restructurings, low profitability, hub arrangements, and a heightened focus on economic substance are keeping taxpayers and advisors on their toes as tax authorities look for stronger assurances that they are not missing their "fair share" of value chain profits.

Transfer pricing cannot be considered simply from the perspective of one jurisdiction; adopting a conservative position in one jurisdiction may in fact drive risk in other markets.

As such, an holistic and balanced approach is required, supported by commercial judgment and deep industry expertise.

Our approach to managing riskRSM optimises the process of establishing and defending your transfer pricing positions by offering a tailored assessment of your cross-border tax risks to support internal risk management.

The core benefits of proactively designing and implementing a robust transfer pricing model include:

Enabling internal transparency and process improvement through understanding of pricing, margins, and global costs;
Demonstrating the current and future value drivers that may contribute to your cross-border tax positions;
Managing if not eliminating exposure to penalties from transfer pricing adjustments;
Reducing the internal work required in the event of tax authority risk review or audit if no documentation was available;
Providing a basis upon which to demonstrate compliance with accounting standards relating to "uncertain tax positions”;
Evidencing the role that transfer pricing has played in appropriate tax corporate governance.

Our capabilitiesRSM is focused on understanding the value drivers of your business to assist in establishing an operational tax and transfer pricing model that’s fit-for-purpose and aligned to the arm’s length standard.

Leveraging deep global and local experience, our capabilities include:

Diagnostic risk assessments of existing cross-border arrangements
Advice on different operating models, their effectiveness, and associated risk factors
Preparation of transfer pricing policy and governance frameworks, and contemporaneous documentation, including benchmarking tailored to your needs
On-hand support to implement and monitor transfer prices, including cost allocation analyses
Negotiation and renewal of Advance Pricing Arrangements with tax authorities
Assistance and support in responding to tax authority reviews and audits
Pricing of intercompany loan arrangements, with specific focus on New Zealand’s unique restricted transfer pricing regime
Assessment of the development, enhancement, maintenance, protection and exploitation (DEMPE) of business intangibles
Mapping Country-by-Country Reporting obligations and managing resulting compliance requirements
Preparation of analyses to substantiate the arm’s length nature of business restructures and compensation payments
Review and drafting of intercompany agreements to ensure legal form aligns with economic substance, including cost sharing arrangements
Assisting in seeking Advance Pricing Arrangements with tax authorities
Assisting in responding to tax authority reviews

Frequently Asked Questions

What are transfer pricing services?

Transfer pricing services refer to professional support and documentation provided to multinational companies to ensure pricing arrangements between related international entities comply with global tax regulations.

These services cover transactions such as the sale of goods, provision of services, and transfer of intellectual property between related parties.

Who needs transfer pricing services?

Any business engaged in international transactions with related entities should consider transfer pricing services. This includes:

Multinational corporations
New Zealand based companies with overseas subsidiaries
Businesses transferring intellectual property across borders
Organisations providing services to related entities abroad

Why are transfer pricing services important for New Zealand businesses?

With over 40 countries now enforcing formal transfer pricing rules, including New Zealand, the risk of tax authority scrutiny has increased significantly. Businesses operating across borders must demonstrate that their pricing arrangements are commercially reasonable and comply with international standards. Transfer pricing services help businesses:

Avoid double taxation
Reduce global effective tax rates
Enhance shareholder value
Maintain compliance with Inland Revenue Department (IRD) and The Organisation for Economic Co-Operation and Development (OECD) requirements

What are the risks of not having proper transfer pricing documentation?

New Zealand’s IRD is actively reviewing multinational businesses, especially those with complex cross-border transactions. Without professional transfer pricing services, companies may struggle to justify their pricing arrangements and face costly consequences. Failure to maintain adequate documentation can result in:

Additional taxes
Interest charges
Penalties from tax authorities
Increased risk of IRD audits and reviews

How does transfer pricing affect my businesses tax obligations?

Transfer pricing services directly impact how profits are allocated between jurisdictions. If pricing arrangements are not aligned with market standards, IRD may adjust taxable income, leading to higher tax liabilities.

Professional transfer pricing services structure your pricing in line with accepted international benchmarks to minimise compliance risks.

What is the OECD’s role in transfer pricing?

The Organisation for Economic Co-Operation and Development (OECD) sets international guidelines for transfer pricing. New Zealand’s IRD follows these guidelines closely, making OECD compliance essential for businesses.

RSM’s transfer pricing services are designed to align with OECD standards, ensuring global consistency and local compliance.

How does RSM’s global network support transfer pricing services?

RSM New Zealand is part of the RSM International Tax Centre of Excellence, giving clients access to global expertise. This network allows for coordinated, coherent documentation and advice across jurisdictions, ensuring that your transfer pricing strategy is both locally compliant and globally consistent.

What does RSM’s transfer pricing service include?

RSM offers a comprehensive 4-step transfer pricing review process that delivers:

Peace of mind through risk mitigation
Proof of compliance with local and international tax laws
Strategic insights into pricing structures

This process includes a detailed review of cross-border transactions, documentation of pricing policies, and alignment with OECD transfer pricing principles. The goal is to provide robust support that is compliant and minimises exposure to penalties.

What documentation is required for transfer pricing compliance?

IRD requires businesses to maintain comprehensive documentation that supports their pricing arrangements. This includes:

Functional analysis of transactions
Economic benchmarking studies
Transfer pricing policies and methodology
Intercompany agreements

RSM’s transfer pricing services include preparing and reviewing this documentation to ensure it meets IRD standards.

How can I get started with transfer pricing services?

Contact RSM New Zealand for an initial consultation. Our team will assess your current transfer pricing process, identify areas of risk, and guide you through the 4-step review process.

Whether you need documentation, strategic advice, or global coordination, RSM’s transfer pricing services are tailored to meet your business’s unique needs.