Global VAT Compliance made an analysis of impact of transfer Pricing Policy on VAT compliance position in Europe for Fortune 500 company
One of the major manufacturer and seller of Sports equipment and apparel asked GVC to analyze its new transfer pricing policy from a VAT compliance perspective.
Transfer pricing policies often include the allocation of risk with respect to the goods sold. If a group company owns the goods, the risk related to these goods remains with that company and this attracts profit allocation. For VAT, owning the goods that are moved between countries means that VAT registration and reporting obligations come up for the owning company. GVC analyzed the impact of VAT compliance obligations in the group depending on the moment and territory where the ownership of the goods transfers.
As a result the client could make sure that the location where movement and sales of goods where inline with the transfer pricing polices.