Transfer Pricing Services
Tax authorities have significantly increased their focus on transfer pricing (“TP”) issues, and the KRA has been particularly aggressive in conducting TP audits targeting many multinationals. The company is required to maintain proper transfer pricing documentation. Accordingly, our scope will include a review of the company’s business operations and organizational structure to ensure compliance with the arm’s length principle.
The specific objectives are as follows:
- Carrying out a comprehensive review of the Group’s intercompany funding requirements, assessing the appropriate arm’s length rates to be applied, and preparing transfer pricing documentation for the intercompany financing arrangements.
- Review of services provided by Group entities to the Kenyan company, assessment of the appropriate arm’s length rates to be applied, and preparation of transfer pricing documentation for the management support services and any related charges.
We will undertake the following:
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Functional analysis
Conduct functional analysis interviews to gain a detailed understanding of the functions performed by the company and its related parties. The findings will be used to update the functional analysis section of the report, guide the benchmarking update exercise, and provide insights into the nature of pricing arrangements between the non-resident entities. In addition, we will review the agreements in place between the company and its related parties.
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Industry Analysis
We will carry out an industry analysis to ensure that the performance of both the local and global industry, as well as any factors that may have influenced industry performance during the years under review, remain current and relevant.
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Benchmarking studies
We will annually or as required review the bench marking studies in order to ensure the results of independent comparable companies involved in similar transaction(s) remain updated.
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TP documentation
We will annually ensure that TP documentation is up to date taking the above into account. The documentation 28 will be based on the Kenyan transfer pricing provisions and the OECD Transfer Pricing Guidelines.