We also recommend that you take a look at your transfer pricing landscape at the end of 2023 in order to initiate any measures for the current year in good time or to initiate adjustments for the coming year.

2023 is the fourth year in a row characterised by extraordinary developments: energy prices, material shortages, interest rate jumps, inflation and currency fluctuations. Plus the trouble spots of Ukraine, the Middle East and potentially Asia. These factors will continue to influence your tax, customs and transfer pricing environment in 2024. Keep an eye on:

(1) Company-specific matters

A review of the EBIT margins of (sales) companies or profit mark-ups actually realised for production or service transactions. Are these synchronised with the value added contributions made? Are adjustments necessary in the planning calculations for 2024? Were unforeseeable adjustments to the functional and risk profiles of affiliated companies necessary in 2023? Do the contents of your intercompany agreements still match the actual implementation?

(2) Updating transfer pricing documentation and database studies

The OECD recommends that transfer pricing documentation and database studies be regularly reviewed and updated. Functional, risk and economic analyses should be updated annually, database studies every three years and financial data annually. Database results can be applied not only ex-post for documentation purposes, but also forward for planning purposes. Compare your TP policy for 2023 with the current course of the year, discuss whether the earnings situation of local companies corresponds to this or whether adjustments at the end of the year make sense, taking into account customs and VAT issues.

The submission deadlines for master and local files or CbCR are getting shorter and shorter, so make sure that they are created in good time in your internal processes.

(3) Current international developments

such as local legal changes, case law, administrative directives or design considerations. Check these changes and their impact on 2024 in good time; the new regulations in Brazil from 1 January 2024 are one example, others include the Global Minimum Tax (Pillar 2) or the Public CbCR.

To help you deal with these points safely, we offer you our Transfer pricing check at the turn of the year 2023/2024 We will jointly review and discuss the ongoing development in 2023, extraordinary business transactions, I/C contracts, the scope and timing of documentation preparation for 2024 and any permanent establishment issues in a structured manner.

Your contact with many years of expertise: Carsten Schmid, Transfer Pricing & Friends GmbH (Member of TPA Global).

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