TRANSFER PRICING
Navigate Transfer Pricing in Asia’s Evolving Regulatory Landscape
Transfer pricing regulations across Asia are becoming increasingly complex as governments strengthen tax transparency and tighten scrutiny over cross-border transactions. For multinational corporations, managing pricing structures, compliance requirements, and financial risks is critical to sustaining growth and operational efficiency.
MABS GROUP provides integrated advisory solutions to help businesses manage transfer pricing effectively while aligning with broader investment and capital strategies across Vietnam and Asia.
Our Advantage
Policy Development and Planning
- Transfer pricing M&A / organization support
- Policy planning and intercompany agreement review
- Profit and cost allocation advisory
- Related party contract drafting and review
Benchmarking Studies
- Functional and economic analysis
- Industry and regional comparables
- Margin and pricing validation reports
Documentation and Compliance
- Transfer pricing documentation preparation and review
- Country-by-country reporting (CbCR) and notifications
- Transfer pricing compliance assessments
- Risk factor analysis and remediation
Audit Support and Dispute Resolution
- Transfer pricing audit preparation and support
- Defense strategy development and risk mitigation
- Liaison with tax authorities and legal counsel
Advance Pricing Agreements (APA)
- APA strategy and feasibility review
- Negotiation support with tax authorities
- Documentation and monitoring
FAQ Highlights
Transfer pricing rules generally apply to transactions between related parties, including the sale or purchase of goods, provision of services, licensing of intellectual property, financing arrangements, cost-sharing arrangements, management fees, royalty payments, and business restructuring transactions.
MABS helps clients review these intra-group transactions to ensure pricing policies are commercially reasonable, properly documented, and aligned with the arm’s length principle.
Transfer pricing documentation requirements vary by country and may depend on transaction value, revenue size, group structure, and the type of related-party transaction involved.
Businesses operating across multiple Asian markets should assess local documentation thresholds annually to determine whether local file, master file, country-by-country reporting, or related-party transaction disclosures are required. OECD BEPS Action 13 introduced a three-tier documentation framework covering master file, local file, and country-by-country reporting.
Benchmarking studies help demonstrate whether related-party prices, margins, or returns are consistent with comparable independent market transactions.
A well-prepared benchmarking analysis can support transfer pricing documentation, validate profit allocation, and provide a stronger defense during tax audits or inquiries. It is especially useful where tax authorities challenge low margins, persistent losses, service fees, royalties, or cross-border financing arrangements.
Country-by-country reporting, or CbCR, requires qualifying multinational enterprise groups to report key financial and tax information across jurisdictions, including revenue, profit, taxes paid, employees, stated capital, retained earnings, and tangible assets.
The purpose is to give tax authorities greater transparency over global profit allocation and economic activity. OECD BEPS Action 13 specifically established the CbCR template as part of the broader transfer pricing documentation framework.
Common transfer pricing audit triggers include persistent operating losses, unusually low profit margins, large management fees, royalty or intellectual property payments, high-value related-party service charges, cross-border financing, business restructurings, and transactions with low-tax jurisdictions.
Tax authorities may also focus on cases where profits appear inconsistent with business functions, assets, risks, or local market substance.
An Advance Pricing Agreement, or APA, can help reduce uncertainty by agreeing in advance with tax authorities on an acceptable transfer pricing method for specified related-party transactions.
APAs can improve compliance certainty, reduce future audit exposure, and support long-term tax planning. Bilateral or multilateral APAs may take longer because they involve coordination between tax authorities in more than one jurisdiction.
The Mutual Agreement Procedure, or MAP, is a treaty-based mechanism that allows competent authorities from two jurisdictions to resolve tax disputes, including cases involving double taxation from transfer pricing adjustments.
MAP can be useful where one tax authority makes an adjustment that results in the same income being taxed in more than one country. It is often considered alongside audit defense, APA strategy, or broader dispute resolution planning.
Transfer pricing is not a one-time compliance exercise. Businesses should review policies regularly to reflect changes in business models, market conditions, profit margins, supply chains, regulations, and intercompany agreements.
MABS supports ongoing TP maintenance through annual documentation updates, benchmarking refreshes, policy reviews, risk assessments, audit readiness checks, and coordination with finance, tax, and legal teams.