What is it?
Transfer pricing represent the prices for goods and services transferred between affiliates, or between controlled legal entities within an enterprise. When a subsidiary company sells goods or services to a parent company, the cost of those goods or services paid by the parent to the subsidiary is the transfer price.
Globalization increases trans-border transactions, while costs are diversified and sometimes centralized. So reflecting these costs over various revenue generating sources or entities leads to transfer pricing. Almost all the countries in CEMAC zone have recently reinforced their legislation on transfer pricing to make sure that, there are not abuses.
Why is it necessary?
Transfer pricing policy is generally aimed at
- Evaluating financial performance of different business units, branch, etc…. of a company.
- Shift earnings from a high tax jurisdiction to a low-tax one.
We do it
We stand ready to accompany you as transfer pricing is legal and admitted with some restrictions in respect with market pricing.
Investors should be aware of:
- Limitations that the tax law has set
- The options exploitable not covered by tax laws,
- Indirect taxes that he may face in that respect.
Transfer pricing is also relevant within the same country when different tax regimes offer tax advantage such as lower rate taxation, fix tax amount, depending of investment place, place of headquarters, revenue cut off, etc…. Our knowledge of CEMAC tax laws may be appreciated at this point as well.