ARTICLE · 23 APRIL 2021

Year-End Transfer Pricing Adjustments And Their Impact On Customs & VAT

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As the end of 2020 fast approaches, we notice that many multinational companies during the coming weeks/months often perform an annual assessment of transfer prices.

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As the end of 2020 fast approaches, we notice that many multinational companies during the coming weeks/months often perform an annual assessment of transfer prices. The key question asked is: "Has our transfer pricing policy that has been applied throughout the year resulted in an arm's length outcome?". This question is one that arises each year; but in 2020, which with the Covid-19 pandemic will go down in history as a year of exceptional events, this question is of an even greater importance for many companies. Some multinational companies perform such assessments on a more frequent basis and as a result face more limited (or even no) required adjustment at year-end. Transfer Pricing ("TP") adjustments are important to manage as they assure arm's length intercompany dealings. However, when changing intercompany pricing it is critical not to forget the impact of indirect taxes. After all, in certain situations, a TP adjustment might trigger an increase or decrease

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