Value Chain Analysis

How PwC can help

Compliance with transfer pricing, tax laws and regulations has gained importance over the last years, whilst at the same time the complexity of those laws and regulations is continuously increasing.

The main focus is demonstrating that the prices applied between related parties and the resulting profits are at arm’s length, e.g. that system wide (or consolidated) profitability is adequately allocated between the respective group entities, taking into account their functions performed, asset utilised and risks taken.

To facilitate that, a functional analysis of each transacting party and a value chain analysis is essential.

With key functions scattered in different countries and local subsidiaries responsible only for project implementation, in first instance one would expect that local subsidiaries should be entitled to routine returns, while the residual profit may be accordingly divided between key function locations. However, depending on the value chain analysis, some amendments may be necessary.

This analysis at the same time allows for an internal risk assessment, to identify material exposures between the profit which is reported and the level which is considered to be arm’s length.

Our team of transfer pricing professionals can help you:

  • Functional analysis
  • Transfer pricing model strategy

  • Value chain analysis and/or transformation

  • Peer group analysis and identification of industry key value drivers

  • Restructuring and OECD Chapter IX analysis

  • Transfer pricing model implementation and monitoring

  • Conversion and defense documentation

  • Global Coordination with PwC Network, i.e. 3,000 transfer pricing professionals deployed in more than 90 countries


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