Fundamentals
Transfer Pricing Policy
A transfer pricing policy is a group-wide framework that sets out how intercompany transactions will be priced, which methods apply to which transaction types, and how pricing will be reviewed and updated over time. It provides consistency across entities and forms the basis for documentation and audit defence.
A well-designed transfer pricing policy typically covers the group's approach to key transaction categories such as intercompany goods sales, management and support services, intellectual property licensing, and intra-group financing. For each category, it specifies the chosen pricing method, the target margin or rate range.
Policies should be reviewed regularly to reflect changes in the business, such as new markets, restructured supply chains, or shifts in where functions and risks sit within the group. A policy that is documented, consistently applied and periodically refreshed gives tax authorities confidence in the group's compliance and.
In practice
What matters when applying transfer pricing policy
- Sets a consistent, group-wide approach to intercompany pricing
- Covers goods, services, intangibles and financing categories
- Specifies methods, target ranges and monitoring processes
- Should evolve as the business and supply chain change
- Underpins documentation and reduces audit dispute risk
Frequently asked
Common questions
How often should a transfer pricing policy be reviewed?+
Most groups review their transfer pricing policy at least annually, and more frequently following significant business changes such as acquisitions, new market entry or supply chain restructuring, to ensure pricing methods and target ranges remain aligned with current operations and market data.
Who is responsible for a group's transfer pricing policy?+
Responsibility typically sits with the group tax or finance function, often supported by external advisers or specialist software, with senior management oversight to ensure the policy is consistently applied and properly documented across all entities and jurisdictions.
See how the tooling handles this in practice
Our transfer pricing tools calculate intercompany charges, benchmark financing and reconcile the intercompany ledger from your own data. Book a short walkthrough and we will show the workflow on a scenario that matches your group structure, rather than a generic demo dataset.