Transfer Pricing Documentation

The entities that makes transactions with an affiliated entity as well as any entities that make transactions in which payment is made to an entity in a country or territory applying harmful tax competition, shall be obliged to keep a special documentation related to the applied transfer pricing. These obligations are determined in Art. 9a of the Corporate Income Tax Act as well as Art. 25a of the Personal Income Tax Act.

The obligation related to keeping of the transfer pricing documentation is in particular advantageous for the entity preparing such a documentation. One reason for this is that the regulations governing the documentation liability constitute a guarantee – that means that they guarantee the affiliated entities that preparation of a correct documentation allows for assessment of transactions between such entities as well as for complying with the market transactions conditions.