Benchmarking & Data
With the introduction by the OECD transfer pricing documentation concept consisting of a Master File, Local Files and a Country-by-Country Report ("CbCR"), many corporates are now confronted with how to ensure compliance with these new requirements in multiple countries every year. At the heart of these processes are a series of annual updates required for benchmarking and other data points. Questro is regularly involved in large-scale documentation projects which involve the establishment and updating of a large number of benchmarks. Effective and pragmatic management of this process, whilst ensuring high quality outputs, is a key factor in mitigating future contentious local tax audits. Unfortunately, not all benchmarking is the same, and the cheapest option is often significantly more expensive in the long run.
How Questro helps clients
Arm's Length Range
Benchmarking is important to all transfer pricing matters as economic references are critical when steering and justifying the income allocation within a group or for a specific intercompany transaction. In many cases, benchmarking is not just a routine matter but needs careful consideration in respect of comparability, search strategy, and interpretation as well as application of results. Questro International provides a full range of benchmarking services including:
- Operating margin and profit based benchmarks (TNMM);
- Royalty rates for the licensing of intangibles (IP);
- Interest rates and financial benchmarks (FS); and
- Speciality benchmarks.
Public Data Disclosure
A multitude of transparency initiatives, coupled with the OECD BEPS work, has moved the pendulum of public opinion towards increased public disclosure of a corporate’s tax strategy and tax profile data.
The associated risks & opportunities are dependent upon a wide range of factors, including your current TP strategy & compliance approach, the inherent risk profile of the industry and the countries in which you operate, and your current approach to tax transparency & sustainability. Questro has significant experience in helping clients manage their data disclosure requirements and consider risk mitigation strategies, from CbCR disclosures and accompanying Table 3 statements, to public statements on TP Policies.
