Transfer Pricing Policy And Its Impact On Risk Management

A strong transfer pricing policy starts with a real understanding of how the company and the group it belongs to, not just relying on out-of-the-box models or general theoretical treatments. Each company operates within a different operational context, and each entity within the group has a specific role to play in creating value, whether it’s through manufacturing, distribution, service delivery, asset management, or risk tolerance. Building an effective policy requires first a careful reading of the business model and the nature of the relationships between the parties and how to distribute jobs, responsibilities and returns among them, so that politics is an expression of the actual reality and not only the theoretical perception.