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.