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If you carry out transactions with related parties, you should know that you have the formal obligation to prepare a transfer pricing documentation file and present it to the tax authorities upon their request.
You should not wait for their request as it may be a little late for your company to avoid the potential transfer pricing penalties and adjustments.

So, start preparing your transfer pricing file! You may start this exercise by considering the practical steps listed below.

Practical steps in drafting the TP file: 

      

                                                           

According to the Fiscal Procedure Code, if the transfer pricing documentation file is not prepared or presented to the tax authorities, the following fines apply:

- from 12,000 RON to 14,000 RON for companies falling within the category of medium and large taxpayers; 
- from 2,000 RON to 3,500 RON for the other companies and for the individuals. ( the daily exchange rates for the Romanian leu, here)

But, in addition to the fine, if the transfer pricing documentation file is not prepared / presented, the tax authorities are entitled to estimate the transfer prices applied by the taxpayer in transactions carried out with related parties. This may lead to additional amounts to be paid to the state budget.
 

Any failure to submit a transfer pricing documentation file by the end of notice period provided by the tax authorities (30-90 days after initially prescribed 180 days from the end of fiscal year) is subject to a fine ranging between RSD 100,000 and RSD 2,000,000 for the company and additionally RSD 10,000 to RSD 100,000 for the responsible person of the company.

However, the most critical matter is the fact that any failure to submit / submission of an incomplete transfer pricing documentation file entitles tax authorities to proceed to their own assessment of taxpayer’s transfer prices.

Such transfer pricing assessment procedure may result in significant adjustments of the transfer prices applied in related party transactions. Therefore, related parties are advised to prepare their transfer pricing documentation file and avoid facing tax authorities applying their own assessment procedure in disregard of the particularities of the inter-company transactions under review or the tested entity’s functional and risk profiles.

Your company needs transfer pricing documentation which will be an useful instrument in defending your tax position in front of the tax authorities?

We have the required expertise which allows us to draft any transfer pricing documentation whatever the industry or business model.

Please fill in the order form below and a TPS representative will contact you as soon as possible to discuss the particularities of your case in detail and mutually agree the steps to follow.

TPS ensures full confidentiality of your data.