Expanding sales and operations globally has its challenges. Whether we need to establish a local entity, and what type of entity, if at all, are questions the answer of which has tax considerations to be discussed with management. Including the potential increased compliance fee.
For example, even if no local entity will be required, sometimes, the ability to claim back VAT paid to local vendors in the foreign country may only be available if we register for VAT in that country before we start generating expenses in that country. Planning in advance is key and can save significant amount of tax that otherwise will be added to your cost of doing business.
Transfer Pricing & Intercompany Transactions
If brainstorming with the operational teams and management results in the establishment of a local entity, developing a transfer pricing strategy supported by intercompany agreements, is necessary. Working seamlessly with the cross-functional teams to understand the allocation of functions among the legal entities involved is key to developing a scalable transfer pricing strategy that best serves the financial results of your business.
Such strategy will then need to be documented in intercompany agreements and supported by economic analysis, performed by qualified economists. We work directly with the legal department and the economists and orchestrating and guiding the drafting of the intercompany agreements and the transfer pricing documentation.