Transfer Pricing Methods

Transfer pricing methods are used by companies that have common ownership when they exchange goods and services with each other. For example, if a subsidiary and holding companies both sell goods or render services to each other, they must agree on a transfer pricing method, in order to price these transactions and avoid violating U.S. antitrust law that prohibits price-fixing agreements between competitors. The professionals at Cendrowski Corporate Advisors guide companies of all sizes through the complexities of transfer pricing methods.

It is critical for businesses to have a well-designed transfer pricing policy and implementation to address tax liabilities, potential exposures, expensive penalties or even PR damage. A lesser known fact? Transfer pricing doesn’t only apply to companies doing business globally. Companies of all sizes, even those who only operate domestically, need a transfer pricing plan.

Transfer pricing is an integral part of any multi-operational business. The benefits are numerous, but those benefits must be mitigated by risks like regulatory scrutiny and complexities in international law. In our current political climate, changes to tax policy could make it even more challenging for business owners to manage their transfer pricing policy.

In order to design a transfer pricing policy that works for your company's needs, there must be careful consideration of transfer pricing methods and the types and volumes of intercompany transactions you engage in.