What is a transfer pricing report?

A transfer pricing report is a set of documents prepared by an enterprise with a related transaction. It must clearly state most issues related to transactions with affiliated parties. From the corporate structure, the company's organizational chart. Up to details of transactions arising with related parties during the reporting period. In particular, the Anti-Transfer Pricing Report must contain transaction information similar to that of independent parties. This is the core point of the Anti-Transfer Pricing Report. If there is no accurate source and reliability of the information cited. The tax authority has the right to immediately set the profit rate for the period.

The main transaction needs to be presented on the anti-transfer pricing report

  • Transfer pricing through transfer of raw materials, goods, finished products, and tangible fixed assets;
  • Transfer pricing transactions through intangible asset transfer;
  • Transfer pricing through service provision. Often arises with accounting, law, tax, finance, and information technology consulting companies.
  • Transfer pricing transactions through credit activities.

In particular, transfer pricing through transfer of intangible assets includes:

  • Transfer of intangible assets formed from research and development activities and marketing activities. Often arises in companies that use production and business know-how. There is transfer of semi-finished products to continue producing finished products between affiliated parties.
  • Transfer of intangible assets related to global sales network and product quality management know-how. Often arises for companies producing and trading pharmaceuticals, cosmetics, etc. Product trademarks are used.
  • Transferring intangible assets is the secret to production and business. Often occurs with large construction projects, equipped with high-tech machinery, and long implementation time.
  • Transfer of rights to institution. Often arises for companies manufacturing machinery and equipment, motor vehicles, and electronic products.
  • Division of costs of forming intangible assets. Often arises with manufacturing companies that require high technical skills. The proportion of labor costs in product prices is low. Products quickly become outdated, requiring a lot of investment in research for new products: manufacturing electronic products and automobiles.
  • Transfer of intangible assets through employee dispatch. Often arises with companies that require highly qualified, experienced, and skilled employees, including training and improving the skills of affiliated party employees.
View more  How to make affiliate transaction reports

Actual situation of anti-transfer pricing reports

According to data from Vietnam tax authorities, transfer pricing activities often arise in a number of industries. These are processing industry, garment, footwear, processing...

According to the report on the transfer pricing situation of FDI enterprises in Vietnam. Anti-transfer pricing has recently been implemented in some businesses. Partly due to the lack of anti-transfer pricing experts. Partly because the legal basis for transfer pricing in associated transactions is not yet complete.

Identifying related parties and market prices are two basic issues when considering transfer pricing. Transfer pricing does not only happen in loss-making enterprises. It also happens in businesses that break even and have modest profits. And if we only look at taxes, we are only looking at one aspect of the anti-transfer pricing issue, not all of it.

If your business has a transaction with a related party during the period. Please contact the transfer pricing service department for the most detailed advice.

If your unit needs the service of preparing a related party transaction report, please contact our AACS Auditing Company with the following information:

See more: —–>>> Service of making affiliate transaction reports 

View more  AFFILIATE TRANSACTIONS AND THINGS YOU NEED TO KNOW

Mr: Nguyen Duy Manh – Tel: 0908 381 550 | Mail: manhnd@aacs.com.vn

AACS AUDITING COMPANY LIMITED

 

Tel: 028 66 500 381 – Email: info@aacs.com.vn

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