Transfer Pricing Editing and Proofreading Services

A transfer pricing policy states that intercompany transactions between a parent company and its foreign subsidiary "are priced at arm's length in accordance with applicable regulations." A tax authority reviewing this during an audit has been given a conclusion, not evidence, because the statement never says which pricing method was actually used, what comparable transactions or companies the price was benchmarked against, or why that method was chosen over the several other methods available, and an unsupported claim of arm's length pricing is exactly what a transfer pricing audit exists to test.

We edit what transfer pricing specialists and finance teams produce to document and defend intercompany pricing — transfer pricing methodology and comparable selection disclosures, benchmarking study documentation, functional analysis write-ups, and the correspondence responding to a tax authority's question about a specific intercompany transaction's pricing. Our editors work on the claim that has to show its method, not just assert its conclusion.

The disclosed pricing methodology is what a transfer pricing claim actually needs behind it, and its failure is a conclusion — priced at arm's length — presented with no visible method connecting the actual price to anything comparable. Arm's length pricing is not a fact that can simply be asserted; it is a conclusion that has to be reached through a specific, defensible method applied to specific comparable data, and a policy statement with no method shown is asking a tax authority to accept the conclusion without the analysis a transfer pricing audit is specifically designed to scrutinise. We work through these so the specific pricing method used is named — comparable uncontrolled price, resale price, cost plus, transactional net margin — with the reasoning for choosing it over the alternatives, since a tax authority needs to see that a method was actually selected deliberately for this transaction type, not applied by default; so the comparable companies or transactions used in the benchmarking are identified with the criteria used to select them, given that a benchmarking study built on comparables that do not actually resemble the tested transaction produces a result that looks rigorous and is not; so the functional analysis underlying the pricing — which entity bears which risks, performs which functions, owns which assets — is stated specifically, because pricing that does not reflect the actual allocation of functions and risks between the entities cannot be defended regardless of which method was used; so any adjustment made to raw comparable data is disclosed with its reasoning, rather than absorbed silently into a final range; and so a tax authority's specific question about a specific transaction's pricing receives the actual analysis behind it, not a repetition of the general policy statement. Documentation written this way survives an audit because the method was already shown before anyone had to ask for it.

Everything you send is treated in confidence, including pricing data, benchmarking studies and correspondence with tax authorities. We are editors rather than transfer pricing specialists, tax advisors or economists, and we offer no view on pricing methodology, comparable selection or arm's length determinations. What we can do is make sure the claim shows the method behind it.