Transfer Pricing Services
Why China TP deserves a dedicated discipline
China operates one of the more stringent transfer-pricing regimes in the world and is also one of the more active in adjustments and penalties. The framework is set by SAT Announcement 6 (2016), the related-party reporting forms, and the 2024 implementation of BEPS 2.0 Pillar Two; it is enforced by a national task force that increasingly shares data with customs and the public-security bureau. For a multinational group with operations in China the TP position is rarely contained within the China entity — it sits on top of the group's supply-chain and IP structure, the location of head-office functions, and the destination of intra-group services and financing. We work on the China leg of that picture, and where helpful coordinate with our network on the global design.
Our services
TP documentation and benchmarking
We prepare the contemporaneous documentation required under SAT Announcement 6 — the master file, the local file and the country-by-country report notification — and the supporting benchmarking studies using defensible databases and the appropriate methodology (BEMSEA / CPM / TNMM, profit split and resale-minus where they fit). We keep the documentation in a state that withstands the in-charge bureau's scrutiny and that can be produced promptly at request.
Risk review and remediation
Where a group has not previously prepared documentation, or where the existing policy is exposed, we conduct a structured TP risk review covering controlled transactions, intra-group services, cost-contribution arrangements, royalties, and the location of intangibles and risk. The output is a quantified exposure estimate and a remediation plan that can be implemented before, or in response to, an enquiry.
Advance Pricing Agreement (APA)
We support clients through the unilateral, bilateral and multilateral APA processes administered by the STA. Our role covers the feasibility assessment, the preparation of the application, the critical assumptions and functional analysis, and the negotiation with the in-charge bureau and where applicable the treaty partner.
Audit defence and MAP
Where the in-charge bureau opens a TP audit or proposes an adjustment, we assist with the documentation production, the technical defence, and the negotiation of settlement. Where the dispute is cross-border we coordinate with the relevant overseas counsel under the Mutual Agreement Procedure (MAP) and the BEPS 2.0 dispute-resolution mechanisms.
Pillar Two readiness
For groups above the EUR 750 million revenue threshold, we assist with the China-side GloBE calculations, the identification of top-up tax exposure, and the interaction between the Pillar Two regime and the existing China TP framework. We work alongside the group's central team on the data architecture and the transitional safe-harbours.