A practical guide to transfer pricing

Step 2 indicates an obligation to check whether related parties have made any transactions or entered into commercial or financial relationships. If so, the total value of related-party transactions should be reported on the CIT return.

Step 3 finds out whether the CIT base will include any deemed distributions arising from related-party transactions (TP adjustment). If an adjustment is required, the difference between the amounts of related-party transactions should be reported on the CIT return.

Step 4 checks whether the taxpayer is required to prepare and file TP documentation to prove that the prices are arm’s length.

We offer a functional support tool “Transfer Pricing  Requirement Calculator” where the taxpayer can answer a set of questions (e.g. assessing whether the company has any related-party transactions and what amounts are involved) to work out the total value of related-party transactions to be reported on the CIT return and understand whether the taxpayer is required to prepare any particular form of TP documentation and file it with the SRS.