The order No. 1K-123 issued by the finance minister of Lithuania in 2004 states the obligation for financial and insurance companies or every other company which has a turnover above 3 mil. EUR to prepare annual Transfer pricing documentations for every transaction (or group of transactions) with associated foreign parties valued separately or together above 90 thousand EUR.
Tax administrators in Lithuania as well as all over the world give exceptional attention to Transfer pricing, initiate tax audits, analyse the transfer prices applied between associated parties and if discrepancies are found – the administrator then adjusts the tax base and issues fines as well as late payment interest fees. In extreme cases companies might even be marked with an “unreliable taxpayer” status preventing participation in public tenders.
We in Grant Thornton have an experienced team and the most modern tools so that we could help Your company find the most pragmatic and effective solutions for ensuring sufficient compliance and the minimisation of tax risk in the often quite technically complex area of Transfer pricing.
We advise companies in various matters relating to Transfer pricing e.g. in setting the price for a new or non-typical transaction, dividing the profit of a permanent establishment etc.
We conduct Transfer pricing risk assessments on past transactions and help our clients choose compliance solutions that are the most optimal to their specific situation.
For complex transactions we also help prepare applications for advance pricing agreements (APAs) with the tax administrator.
We prepare Transfer pricing documentations for past transactions with associated parties in accordance to the local Lithuanian legislation, international OECD‘s Transfer pricing guidelines and the best international practice.
Our services include preparation of the Master File, which must be prepared by international enterprises with turnovers above 15 mil. EUR (in cases where this file is not prepared by another group company) as well as the Local File. We cooperate with Grant Thornton network advisors all over the world and can help prepare Transfer pricing documents in whichever country our client‘s company group operates in.
We take in to account the needs of our clients and offer pragmatic solutions in ensuring efficient Transfer pricing documentation compliance. In cases where formally the Transfer pricing documentation is mandatory but the transactions themselves carry very little or no tax risk at all, we often recommend choosing a more cost-effective and less time consuming compliance procedure – the preparation of a simplified Transfer pricing documentation. Such a document includes only the analysis of core transaction aspects and the evaluation of the transaction‘s compliance to the arm‘s length principle. During a tax audit, the tax administrator may demand a full Transfer pricing documentation and in such a case the taxpayer is given a 30 day period to provide it. If the taxpayer already has a simplified version of the documentation in which the transactions are found to be carried out at arm’s length, a period of 30 days is more than enough time to fill in the additional information.
We prepare Transfer pricing strategies and policies for future transactions in accordance to the local Lithuanian legislation, international OECD‘s Transfer pricing guidelines and the best international practice.
We help our clients choose a Transfer pricing method that is the most reliable and most appropriate to the specific situation at hand. By cooperating with Grant Thornton network companies all over the world, we help ensure that the pricing policy will be compliant to the local legislative requirements of every country in which it will be adopted. We provide advice on possible risks, practical application of pricing principles, help prepare calculation tables as well as provide Transfer pricing adjustment accounting note templates.
Considering the needs of our clients, we can produce tailored and exceptionally detailed Transfer pricing policies as well as simplified ones that are more appropriate for typical or lower-value transactions. The simplified Transfer pricing policies include only the core transaction aspects and Transfer pricing analysis ensuring the pricing arrangement’s compliance to the arm‘s length principle.
We prepare Transfer pricing benchmarking studies in determining market profitability, mark-up and margin rates for every industry. To get the most reliable results in the shortest amount of time, we utilise only the most modern databases and search tools (AMADEUS TP Catalyst Pro, etc.).
By cooperating with the best experts in their respective fields (RoyaltyRange, Ober-Haus etc.), we prepare market price benchmarks for sale/ rent of real estate, financing arrangements (loans), licencing deals and various other transactions.
Our experience
The team has extensive experience in preparing Transfer pricing documentations and policies, providing Transfer pricing risk assessments, advice regarding non-typical situations and various other services to large multinationals as well as mid-sized Lithuanian companies. We have worked with numerous different clients from various sectors including manufacturing, software development, wholesale trade, construction, agriculture, oil & gas, logistics and many others.
We have extensive experience in applying all 5 of the internationally recognised Transfer pricing methods (Comparable uncontrolled price (CUP) method, Resale price method (RPM), Cost plus method, Profit split method and the most common - Transaction net margin method (TNMM) that utilises benchmarking studies which we conduct by utilising specialised databases.
Client satisfaction is our ultimate goal
Grant Thornton Baltic UAB tax team has successfully helped our company AB “Klaipedos nafta” prepare Transfer pricing policy for a future transaction with an associated foreign partner. We are very pleased with the professional, operative and pleasant communication and cooperation process and recommend this service provider and its team for Transfer pricing advisory services.
