Transfer pricing: strategic substantiation of internal value flows

For international operating companies, transfer pricing is an essential part of their tax and legal structure. The transfer prices between group companies determine how profits are distributed across countries and entities.

What was once a purely fiscal exercise has now become a strategic issue that affects the structure and reputation of the group.

Transfer pricing: more than just compliance

Based on the 'arm's length' principle, companies are required to apply commercial prices for transactions within the group. This includes the supply of goods and services, but also internal financing or the use of intellectual property.

Companies that are part of a group with a consolidated turnover of at least €50 million must substantiate their pricing in a Master File (group file) and Local File . This documentation must be ready at the time of filing the corporate income tax return. The documentation requirement goes beyond figures: who bears the risks, where are the functions located, and how is decision-making legally anchored?

Transfer pricing therefore requires substantive insight and process-based control. HVK Stevens supports you in this with integrated legal and tax advice, from drawing up a transfer pricing policy to assisting with benchmarking analyses.

Tax and legal consistency in transfer pricing

Effective transfer pricing involves more than just taxes. It starts with the legal and economic design of the group structure and the distribution of functions within the group. The transfer prices used between affiliated companies must be in line with the contracts, functions (e.g., R&D, management, sales, etc.), risk distribution, and ownership rights within the group.

HVK Stevens helps you embed transfer pricing in the group structure from a legal and tax perspective, focusing on aspects such as:

• The optimal tax and legal structure for group financing
• The commercial justification of royalties and service fees
• The role of substance and the actual activities per entity

Transfer pricing is also important in the event of reorganizations (e.g., the transfer of functions or intangible assets) within the group. Not only for tax certainty, but also to avoid discussions with tax authorities about the place of establishment or economic reality.

Tax compliance: prepared for supervision and consultation

The control of a group's transfer pricing policy is becoming increasingly strict. Both the Dutch Tax and Customs Administration and foreign authorities are asking more questions and conducting more frequent audits.

Companies are therefore choosing to create clarity in advance, for example through an Advance Pricing Agreement (APA). In such a process, it is important that policy, documentation, and reality are well aligned. You can find more information on this page.

A good transfer pricing strategy not only provides certainty in advance, but also during an audit. HVK Stevens guides you through every stage, from policy development and documentation to consultation with the tax authorities and international coordination.

Consistent transfer pricing starts with strategy

A well-designed transfer pricing policy prevents risks, supports structural changes, and makes international profit distribution verifiable. Would you like to know more about a future-proof approach to transfer pricing? Our specialists will be happy to assist you in setting up or revising a transfer pricing policy that grows with your international structure.