Transfer pricing

In response to heightened transparency standards and increasingly stringent disclosure obligations, it is essential to establish a streamlined and coherent framework for producing defensible yet affordable transfer pricing documentation. A well-structured approach enables you to allocate resources efficiently, focus on areas of greatest risk, and ensure consistent compliance with jurisdiction-specific requirements across all relevant territories. Our Global Coordinated Documentation™ (GCD) service helps with it all and can assist your business to:

• Analyse the potential implications of these requirements based on your global footprint and identify remedial actions to take before implementation, as well as establish a strategy for practical and efficient compliance.
• Prepare the Master File and 'core' Local File utilising the GCD concept ('core' document to then be used by each country as part of its Local File report deployed wherever you do business).
• Analyse the output of your country-by-country report, including identifying how any risks could be addressed.
• Review consistency of disclosures with the Master File, Local File and local information returns.

How we have helped?

• Provided Fortune 500 companies with multiple Chinese entities' TPD services.
• Prepared global core-documentation for China domestic companies with international operations.

With global tax reforms reshaping regulatory expectations, intercompany transactions are under unprecedented scrutiny making the structuring and execution of transfer pricing policies have never been more consequential. A robust operational transfer pricing strategy bridges the divide between policy and practice—aligning tax, controllership, treasury, and shared services to ensure cohesive execution.

PwC's Operational Transfer Pricing (OTP) is uniquely positioned to help clients capitalise on these opportunities, offering end-to-end support from data extraction and transformation, to the design of segmentation, allocation, and calculation frameworks, through to outcome modelling and output generation.

Our approach is technology-agnostic and tailored to each organisation's strategic objectives. We collaborate with clients to enhance data integrity, leverage existing technology investments, and establish scalable governance models. Solutions may be embedded within broader ERP migrations or finance transformation programmes, or delivered as standalone transfer pricing initiatives—whether through short sprints or multi-year integrations.

By leveraging OTP, we provide actionable insights for audit defence, support transfer pricing planning from execution to documentation, and facilitate continuous improvement through IT system upgrades.

How we have helped?

• Provided numerous MNCs with various TP technology solutions that enable automatic financial segmentation, compliance report preparation, TP modeling and data analytics.

When it comes to complex transactions to which traditional transfer pricing methods may not be effectively applied (e.g. transfers of equity, transactions related to hard -to-value intangibles etc.), taxpayers may need to seek help from valuation methods, such as Cost Approach, Income Approach and Market Approach, to obtain a technically defensible position on transfer prices.

On the other hand, Chinese tax authorities are paying more attention to the taxpayer’s transfer pricing position in these transactions, in which valuation and pricing is known to be difficult, and are keen to defend the legitimate tax base through innovative methods.

PwC is a market leader in providing these valuation advisory services for tax purposes to our numerous clients. We are dedicated to helping our clients successfully design and implement their transactions with our valuation capability.

How we have helped?

• Assisted a US-based food equipment supplier through a combination of transfer pricing economic analysis and valuation analysis using discounted cash flow (DCF) method, and with its subsequent negotiation with in-charge tax authorities, to mitigate the current equity tax exposure and the future transfer pricing risk.
• Assisted an auto parts manufacturer to refine its royalty payment via valuation analysis on intangibles assets, and subsequent support discussion with in-charge tax authorities.

Governments around the world are focused on transfer pricing enforcement. This situation places a premium on audit and dispute prevention techniques because multinational companies (MNCs) are under constant competitive pressure to structure their worldwide business operations effectively and efficiently.

MNCs need to develop coordinated approaches to audits and disputes around the globe, adopt preventative measures (such as pre-filing rulings and enhanced relationships with certain revenue authorities), and leverage effective dispute resolution techniques in order to achieve the best possible results.

We offer a comprehensive suite of transfer pricing controversy services, underpinned by collaborative technologies and global expertise. Our capabilities span the full dispute lifecycle—from early risk identification and audit preparedness to strategic resolution of complex cross-border controversies, e.g. Mutual Agreement Procedure (MAP). We are committed to keeping your organisation resolution-ready, delivering trusted outcomes through proactive risk management and tailored dispute strategies.

APA

As tax controversies increase globally, companies are facing even more challenges to mitigate tax risk and achieve tax certainty. APA remains an effective tool for achieving those goals.

In China, an APA is a method of reducing the likelihood of an audit, reducing compliance costs over the term of the APA and to provide certainty around a company's tax outcome regarding their international transactions.

How we have helped?

• Assistance in transfer pricing audit cases across Mainland China and Hong Kong in all industries, including automotive, electronic components, office equipment, heavy equipment, franchising, retail and consumer etc.
• Played a vital role in China's first Mutual Agreement Procedure case, granting relief for the affected taxpayers.
• Represented our clients to conclude the first five formal APA cases in China.
• Assisted in the majority of bilateral advance pricing arrangements (BAPAs) concluded in China, including the first BAPA with Korea, Singapore and Denmark.
• Advised on the first China outbound APA.

In today’s increasingly complex tax and trade landscape—further intensified by the implementation of Pillar Two and other trade-related geopolitical impacts, businesses must navigate uncertainty with agility and foresight. Real-time responsiveness is no longer optional; it is a strategic necessity. Simultaneously, end-consumer expectations around service delivery, automation, and artificial intelligence continue to rise, compelling organisations to innovate at speed and scale.

Our value chain transformation services can help companies reimagine their operating models by integrating aligned legal, governance, and tax structures with commercial strategy. We support clients in developing forward-looking, efficient, and digitally enabled approaches to trade, supply chain, and business transformation—balancing short-term risk mitigation and cost optimisation with the creation of long-term enterprise value.

The first China APA for cost sharing agreement (CSA-APA) focuses on global research and development (R&D) costs and confirms that the R&D costs borne by the taxpayer relating to the development of intangible assets are deductible for corporate income tax purposes and exempt from withholding tax during the eight year period covered by the CSA-APA.

Successfully concluding an APA for a complex issue like CSAs substantially reduces the taxpayer’s transfer pricing risk and future compliance and dispute costs. It also enhances the taxpayer’s confidence to increase investments in developing intangible assets in China and exploit those intangibles in the China market.

How have we helped?

• Assisted with the first China CSA-APA case.
• Assisting clients with feasibility and transfer pricing analyses on CSA design and implementation.

Are you examining your organisation’s internal functions and procedures? The benefits of a more strategic E2E transfer pricing execution can be widespread and long-lasting. Reinventing your E2E strategy and processes will lead to a more streamlined approach, reduction in workload, increased accuracy of charges, significantly enhanced transparency, and well-positioned documentation to support future reviews, including local statutory audits.

How we have helped?

• Assisted a wide variety of MNCs in varying market specialisations to improve their E2E transfer pricing-maintaining compliance with local policies and ensuring tax compliance.

With China tax authorities’ increasing focus on VCA in transfer pricing studies, whether it’s explaining the profit profile of your country by country reporting, evaluating the resilience of your transfer pricing generally, or testing the application of specific methods, it is more important than ever before to identify which activities in your business generate value and how profits get allocated. Subsequent to the introduction of BEPS, it is essential that transfer pricing profit distribution must be aligned with the group’s value chain. Corporations are increasingly turning to VCA to meet these needs.

Our Financial Services Transfer Pricing (FSTP) practice stands at the forefront of identifying and offering expertise on an extensive range of issues and developments of transfer pricing within the financial services industry.

We provide forward-looking guidance on the transfer pricing implications of regulatory developments affecting financial services businesses. Drawing on our continuous monitoring of global policy shifts—driven by institutions such as the OECD and other key stakeholders—we help clients anticipate and respond to emerging challenges.

We deliver pragmatic, commercially grounded advice tailored to the unique needs of each financial services sub-sector. This includes transfer pricing for cross-border real estate transactions, structuring of management companies across traditional, alternative, and private equity asset managers, treaty-based or proportional risk ceding arrangements and intra-group service transactions for insurance groups, and booking models, trading services, and intercompany arrangements for banking and capital markets institutions.

We bring together our capabilities in transfer pricing controversy and dispute resolution, GCD, and public country-by-country reporting. Our integrated approach is designed to support clients as they adapt to rapidly evolving value chains, technological disruption, sustainability imperatives, and heightened regulatory scrutiny.

Our Financial Transactions Transfer Pricing (FTTP) network offers deep expertise in navigating the complexities of financial arrangements within multinational groups. In an environment characterised by rapid regulatory evolution and heightened scrutiny, we deliver tailored, sustainable solutions that respond to the dynamic nature of financial transactions and the expectations of tax authorities worldwide.

Financial transactions encompass a broad spectrum—from conventional intercompany loans to the pricing of sophisticated derivative instruments, cash pooling arrangements, factoring, and wider treasury operations such as netting, hedging, and foreign exchange management. These transactions are often material in scale and central to the funding, liquidity, and operational needs of multinational enterprises. Recent revisions to the OECD Transfer Pricing Guidelines have intensified the focus on economic substance, the realistic alternatives available to counterparties, and the capacity of entities to assume and manage financial risk.

In response to this evolving landscape, tax authorities have adopted more rigorous approaches to evaluating intercompany loans, guarantees, and treasury activities, challenging both the structure and pricing of such transactions.

We support clients across the full life cycle of intercompany financial arrangements, offering strategic planning and consulting, policy development, the derivation of arm’s-length interest rates, ensuring locally-compliant documentation, managing tax audits and disputes, and leveraging automation and technology to enhance efficiency and governance. Through our integrated approach, we help clients navigate complexity with confidence, ensuring that financial transactions are not only compliant but also aligned with broader business and tax strategies.