In the current economic context, when countries around the world are making efforts to combat base erosion and profit shifting like never before, transfer pricing must be properly justified and documented to avoid negative consequences of non-compliance.

If you represent a multinational or local company that carries out transactions with subsidiaries, you must comply with transfer pricing rules and special documentation requirements. One of the key documents to prepare and keep up-to-date on a year-to-year basis is the local transfer pricing file, which contains detailed information on transactions with related companies.

The need for compliance in the field of transfer pricing stems primarily from the Fiscal Code, which states that transactions between related parties must be carried out at market value. At the same time, there are formal requirements to document the market value of transactions with affiliated persons by preparing a transfer pricing file, according to Order 442/2016. The transfer pricing file should contain information about the group to which the analyzed company belongs, about the company, how the transactions with affiliated persons are carried out, as well as factual analyzes that demonstrate the market value of the transactions, such as comparability studies or specific price analyses.

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The article was signed by Ionuc Simion, Partner of PwC in Romania, and Livia Teodoru, Director of PwC in Romania

Article supported by PwC Romania