Transfer Pricing Documentation in Practice
In this episode of „hsp live at 11“, Lisa Hägele, a transfer pricing expert at ADKL AG Wirtschaftsprüfungsgesellschaft, and chartered accountant Tobias Polka provide practical insights into how to draw up an efficient transfer pricing documentation. Lisa Hägele brings her many years’ experience in transfer pricing and digitalisation consultancy to the table and is testing the new Opti.Tax software. In this article, you will learn why transfer pricing documentation is no longer a marginal issue, what challenges consultants face, and how a digital solution can help. Practical examples and original quotes from the programme provide an authentic insight.
Why transfer pricing documentation is so important today
Companies must therefore have a rigorous, comprehensive and transparent Transfer pricing documentation to avoid the tax authorities’ powers of assessment and the reversal of the burden of proof. Many clients underestimate the complexity of transfer pricing documentation – Lisa Hägele explains what really matters. The increasing complexity of international business transactions makes it clear that one should no longer rely on traditional tools such as Word and Excel alone. Digitalisation and structured workflows are becoming a prerequisite for working efficiently and ensuring legally compliant documentation.
Case study: How tax advisers efficiently comply with documentation requirements
Until now, many tax advisers and companies have still been preparing their transfer pricing documentation manually using Word and Excel, which is not only prone to errors but can also be very time-consuming. The new software offers enormous advantages, particularly for new clients where corporate structures are not yet known. Thanks to its intuitive interface and clear guidance through the documentation process, users can achieve valid results more quickly. The integrated creation of a Organisational charts enables complex structures to be mapped out easily, thereby providing a visual overview that minimises the risk of errors. Furthermore, the digital structure ensures that important details are not overlooked. Interactive questionnaires and automatic validations ensure a complete representation of the Documentation requirement in accordance with section 90 of the German Fiscal Code (AO).
During the trial run, Lisa was literally thrown in at the deep end: her task was to use the tool to produce a complete set of transfer pricing documentation. Right from the start, she noticed that the intuitive user guidance in a positive light. Particularly helpful: the option to set up a Organisation chart and Service relationships to visually represent the relationships between related parties.
During the trial run, Lisa was literally thrown in at the deep end: her task was to use the tool to produce a complete set of transfer pricing documentation. Right from the start, she noticed that the intuitive user guidance in a positive light. Particularly helpful: the option to set up a Organisation chart and Service relationships to visually represent the relationships between related parties.
Interview with Lisa Hägele: Challenges in transfer pricing documentation
The new software places particular emphasis on the integrated Functional and risk analysis, which offers significant added value. Tobias Polka emphasises: „The software guides the user and provides recommendations based on their responses.“ The system provides particularly effective support when it comes to classifying hybrid companies, which play a special role in Germany. Tobias Polka explains: „Germany has intermediate categories – hybrid enterprises – that do not exist in this form internationally.“ This enables a nuanced and precise Transfer pricing documentation enables. The software lays the foundations for an appropriate distribution of profits and makes it easier to present a case during tax audits. In particular, the combination of live visual charts and integrated task allocation in the cloud optimises the digital Tax Compliance sustainable.
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