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Operational Transfer Pricing

One of the biggest challenges in transfer pricing is ensuring that your business model and transfer pricing policy translates into a simple intercompany agreement that is accurately reflected in your financial statements and statutory returns

Why is OTP important in today’s world?

Operational Transfer Pricing (OTP) provides companies with a strategic edge to navigate the complex web of intercompany transactions. In today’s fast-paced world, having a robust transfer pricing strategy is not just beneficial—it’s essential. We are here to support you in translating your business model into an effective transfer pricing policy that can also be effectively reflected in your financial statements. Contact one of our OTP specialists to know more:

Automate your transfer pricing documentation through a pragmatic approach to transfer pricing technology

Operational transfer pricing is the end-to-end process of ensuring that the transfer pricing policy is correctly reflected in the financial statements of Legal entity.

Alternatively, OTP can be considered as being the accurate, transparent and efficient implementation of transfer pricing policies in the books and records of a company based on quality data and robust processes and controls. Achieving quality OTP outcomes helps provide confidence that agreed upon transfer pricing policies are actually happening on the ground, all around the world.

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OTP often involves navigating complex data across varied systems, leading to potential discrepancies in financial statements. Evolving regulations necessitate greater oversight, highlighting the urgent need for robust solutions. Read more in our article.

In today's regulatory environment, timely and accurate reporting is crucial. Enhanced requirements enable tax authorities to access comprehensive data rapidly, necessitating precise and prompt implementation of transfer pricing policies. This proactive approach helps prevent year-end adjustments and regulatory scrutiny.

A well-structured OTP framework is essential to overcome these challenges. Automation reduces manual efforts, lowers operating costs, and enhances accuracy. This leads to improved analytics and reliable reporting, ensuring alignment of transfer pricing policies with strategic goals.

We convert challenges into opportunities through tailored solutions. By designing streamlined processes that align with your IT vision, we help you transition from mere compliance to strategic control. Our approach involves mapping current processes, identifying gaps, and crafting an efficient target state. 

Whilst there are many different options, Deloitte uses a standard framework approach when helping its clients with improving their OTP processes can help to guide an organisation’s TP team to make TP automation a success, using the following steps:


  • Map
    First, mapping out current processes, including identifying all key interfaces with other stakeholders and identifying people responsibilities
  • Gap
    Identifying gaps or Issue in the current process, then determining which parts of the process to automate and identifying any potential challenges in effecting change
  • Design
    Having established this baseline, the next phase is to design the target state for the OTP model going forward. In this phase, it would be established who is best Place to perform each task, determine target timelines and assess what tasks are low value-add or repetitive which could be automated
  • Transition
    Transition from current state to target state would be determined and evaluated. This involves creating a transition plan and managing change activities such as handing over existing tasks to new process owners, defining new RACI matrices and Update the target state to take into account practical aspects encountered during transition


We offer half day and full day workshops with you and the relevant key stakeholders within the business to walk you through the steps above and ultimately set out the roadmap in order to achieve your goals.

Improving your OTP framework has many benefits, most notably:


  • It has the potential to significantly reduce operating costs, given a combination of factors, including; reduction in payroll due to lower manual effort required, lower indirect or second order tax effects, lower tax penalties due to increased accuracy etc.
  • Automation significantly reduces manual efforts and process turnaround time, reduces the risk of manual errors through process controls and increases traceability and audit trails.
  • Clearly defined and established OTP processes more easily cope when transfer pricing team members change.
    More impactful analytics and reporting through data visualisation.
  • Higher accuracy and reliability in external reporting.
  • Significant time saving which can be spent on tax strategy and analytics.

Watch: OTP video series

In a changing transfer pricing landscape with increased regulation and tax authority scrutiny, it has never been more important to have effective and continuous implementation and monitoring of TP policies throughout an organisation.   

Operational transfer pricing (“OTP”) focuses on the details of how practical these policies actually are to implement for the business and the best way to do so. 

With this in mind, we have put together a series of short Video where Deloitte transfer pricing professionals outline the key points that you should know in respect to OTP and how Deloitte can best help your organisation navigate to a successful Solutions.

How Deloitte can help?

There are a wide spectrum of technology solutions available in the marketplace that can fulfil your current business needs―but there is no one "perfect Solutions". To help you to identify the best fit for your organisation, Deloitte has a unique approach and process to help you:


  • Improve your existing transfer pricing processes
  • Identify data and people gaps
  • Leverage your existing IT infrastructure and future IT vision

By implementing a suitable technology Solutions and Update processes, you will enjoy the following benefits:


  • An accurate reflection of TP policies in your financial statements;
  • A near real-time access to data necessary to monitor your transfer pricing
  • A timely identification of any TP adjustments necessary;
  • An efficient and quick book close process; and
  • Readily available data segmentation that makes it possible to fulfil TP documentation and compliance requirements.