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Manage: Global Transfer Pricing Documentation

Digital DoX

Businesses are under more pressure than ever to find efficient ways of managing Transfer Pricing (TP) documentation. The OECD recommendations are being expanded with additional local legislative requirements and tax authorities expecting local detail and exactness when scrutinizing it under audit.

Are you looking to enhance your TP documentation process and operating model?

How do we achieve the required localization while maintaining necessary global consistency? Doing this without large resources and cost lies at the heart of the challenge.

Deloitte understands this challenge. Although 99%* of businesses outsource some of their work, they want to partner with their service provider to divide the work in different ways, be it benchmarking, local country files, functional analysis, master file, or coordination of documentation. To address these needs, our approach is flexible and customized.

A successful process will include:

With current delivery models, 60%* of global TP decision makers think there is room for improvement in their compliance and documentation process.

We recommend starting by looking at the processes and documentation that already exist. Our priority is to get the job done and get it done right. Look at resource levels in each area, existing and needed processes. We will work together with you to review risk levels for jurisdictions, entities, transactions, and assign resources accordingly.

By the time we’ve drawn up a plan, we will have considered the expectations and deliverables across all areas. We will provide a clear view of what is needed and recommendations as to how to meet those demands.

Tax authority demands for localized information continues to put pressure on TP teams. 77%* of global TP decision makers disagree that most tax administrations will interpret the proposed changes to the TP Guidelines in a consistent manner. Hence, we find a modular approach, the most efficient way to gain consistency but still allow for local flexibility. For those businesses who are ready, we can translate this into our web-based application that takes some of the legwork out of it.

A modular approach also lets us focus resources on the high value, strategic or significant transactions, rather than an indiscriminate approach. This balance between consistency and localization, with a focus on key areas, supports businesses being audit-defense ready.

The objective is to provide visibility, transparency, and governance globally. Our process allows for real-time information; to meet deadlines, manage risk, and support compliance globally and locally.

Data analytics together with our insights on upcoming policy changes, can mean that adjustments and revisions can occur in real time, rather than retrospectively.

Documentation should go beyond compliance. Once the day-to-day and year-to-year compliance is running smoothly, let’s consider the future. It is known that the potential of TP documentation is not fully realized. This might be to provide a base to work up an audit-ready position, develop policies and standard positions globally, manage and reassure stakeholders, identify potential opportunities and enable creative thinking, provide analytical reviews, produce an executive summary for the management and add value in other ways. We want to help you future-proof your business.

We understand that underlying the challenge of all this is the constant pressure on budget and cost. We look at how we can reduce the global cost of delivery, together with the global tax risk. Ultimately though, your stakeholders aren’t just looking at reduced cost. We need to add value.

We work with your teams to build stronger partnerships in the wider business to leverage data and deliver commercial value. The result of our process improvement will be improved quality and availability of data and this can drive significant gains.

Go further than just cost and efficiency gains. Free up talent, leverage the power of data, explore the undiscovered, and find something new.

What is TP Digital DoX?

TP Digital DoX is Deloitte’s global proprietary web-based application for generating transfer pricing reports. Its modular approach leverages existing and newly created information to enable flexible collaboration between internal and external users.

This web-based solution provides a central project management via an integrated dashboard. It facilitates and streamlines the efficient preparation of TP documentation reports, while enabling collaboration.

Why TP Digital DoX?

The application enables a streamlined and collaborative process involving both central and local teams. It facilitates the drafting of transfer pricing documentation through questionnaires and report templates.

It’s entirely flexible and scalable depending on your needs, and the automation reduces human error and removes much of the duplication that can otherwise occur in preparing the documentation around the world.

Technology-enabled documentation process

Leverage existing reports through a technology-enabled modular approach for efficient and consistent report generation.

TP Digital DoX: Key functionality

User experience

The drag and drop interface is intuitive to use and appears in multiple languages. Integrated dashboards and workflow management capabilities help to coordinate project oversight and teaming centrally. Tasks can be assigned, completed, and progress monitored while chat-style commentary facilitates communication both between your teams, colleagues, and our advisers.

Import functionality

The Block Importer automates the digitization process by taking existing documentation and breaking this down into ‘blocks’ which can be assembled into the required reports. Pre-formatted questionnaires map responses automatically into template reports consistent with local requirements and OECD/BEPS guidelines.

Libraries

The ‘blocks’ are stored in libraries with meta tags. This allows for report assembly using one source of data repeatedly with the flexibility to add local content.

Next gen modularization

Users can drag and drop ‘blocks’ into templates for localized reports. These reports can be collated centrally and then localized or arranged at a local level and then harmonized and reviewed by teams around the world.

Personalized dashboards and data analytics

On-screen project management allows for clear tracking of workflow management to tasks and deadlines. Real-time data allows for informed decision-making and alerts teams to issues before they arise. Workflow management, through the dashboard, maintains control of content and deadlines, and also gives an audit trail.

On-demand reporting

Reports and drafts can be generated on demand. Since information is stored in blocks, as it is updated or changed, all reports automatically access the latest version allowing a one-touch revision of all associated content. These reports are country-specific and can be localized as required. Because the data is accessed from central libraries, consistency around the world can be ensured. And as all reports can be reviewed centrally, governance protocols are met.

* All data cited from independent research with 250 global decision makers in Transfer Pricing.

See also

Transfer Pricing Documentation Summary

Country-by-country reporting and documentation information
Deloitte's Transfer Pricing practice has prepared the Global Tax Reset - Transfer Pricing Documentation Summary, which compiles essential country-by-country reporting and documentation information (including master file/local file information, if applicable) for 136 jurisdictions around the world.

Find out more

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