Transfer pricing in Hong Kong

Echoing the initiatives of base erosion and profit shifting (BEPS) raised by the OECD, more and more countries are adopting comprehensive transfer pricing rules and tightening transfer pricing administration.

Transfer pricing has become a key tax issue that will impact business operations, costs of the business and certainty of tax positions. Improper transfer pricing arrangements may trigger double (or even triple) taxation as well as significant penalties and interests.

How we can help?

Strategic review and planning

In order to improve net earnings and cash flows in the evolving global economy, companies can reduce costs and mitigate risks by restructuring their supply chains and operating models as they globalise. We can assist them in designing appropriate holding and transfer pricing structures to optimise tax efficiency, achieve operating synergies, streamline processes, while fulfilling stringent transfer pricing requirements around the world.

Documentation

Transfer pricing documentation is becoming a mandatory tax compliance requirement in many jurisdictions, which generally includes Master File, Local File and Country-by-Country Reporting. Tax authorities usually make reference to taxpayers’ documentation when selecting audit targets. Therefore, effective documentation can serve as a first line of defence for taxpayers to potential queries and challenges from tax authorities.

With our presence and expertise in many major jurisdictions around the world, PwC has abundant experience to help companies prepare transfer pricing documentation to comply with local requirements in a timely and yet cost efficient manner.

Dispute resolution

As many jurisdictions have increased scrutiny of transfer pricing matters, this trend requires companies to defend their transfer pricing positions during investigation. Resolving transfer pricing disputes can be difficult because of the complicated nature of commercial facts surrounding the transactions as well as the potential significant corporate tax and other turnover tax implications.

We can coordinate with transfer pricing professionals in jurisdictions worldwide to provide effective representation for multinational groups through all phases of controversy resolution. We can also offer advice on the most effective strategy to pursue and provide tax advice, technicality and support in any state of disputes including examination, administrative appeals, competent authority, advance pricing agreements, or litigation.