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      KPMG helps businesses establish transparent, arm’s-length pricing approaches, reduce the risk of tax adjustments, and ensure compliance with the legislation of the Republic of Kazakhstan as well as international guidelines (OECD, BEPS).

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      Find out how KPMG's expertise can help you and your company.

      For transfer pricing risk management, we are approached in the following situations:

      • Intra-group transactions, including royalties, services, loans, and supply of goods;
      • Transactions with counterparties from low-tax jurisdictions;
      • One-off significant transactions, such as transfers of assets and rights of use, supply chain restructurings, and creation of intangible assets;
      • Deviations in the company’s or specific transactions’ profitability from industry benchmarks;
      • The need to comply with statutory requirements for the preparation and submission of TP documentation and reports.

      How KPMG Can Help

      We provide a full range of TP services:

      Conduct diagnostics of TP-related tax risks and develop recommendations to minimize tax adjustments risks;

      Advise on the planning of cross-border transactions to ensure compliance with TP requirements;

      Develop TP policies in line with local legislation and international best practice;

      Prepare documentation for submission to tax authorities, including Local File, Master File, and Country-by-Country Report (CbCR) and CbCR Notification;

      Develop pricing methodologies in accordance with TP requirements and defend them before the tax authorities;

      Provide support during TP tax audits;

      Support M&A transactions and restructurings by structuring transactions in line with TP rules and prepare economic justifications for intra-group pricing.

      KPMG’s Practical Recommendations on TP

      When executing or planning intra-group transactions, it is recommended to:

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      Intra-group Transactions and Services

      • Determine arm’s-length prices for intra-group goods and services to ensure compliance with TP regulations and minimize the risk of adjustments;
      • Ensure transparent cost accounting to identify direct costs and objectively allocate indirect costs;
      • Perform a functional analysis to fairly allocate functions and risks among transaction participants and to reliably benchmark transaction terms against market conditions;
      • Conduct a benefits test to confirm the business purpose and economic benefit of the transaction and properly document the results.
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      Intangible Assets

      • Determine arm’s-length remuneration for the use of intangible assets, taking into account DEMPE* functions that reflect the actual contribution of group companies to value creation;
      • Consider that legal or formal ownership of intangibles does not automatically entitle an entity to royalty income; profit allocation should reflect the actual performance of DEMPE functions.

      *DEMPE is an internationally recognized TP concept used to determine entitlement to income from intangible assets.

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      Intra-group Loans

      • Calculate an arm’s-length interest rate for intra-group loans;
      • Assess the borrower’s creditworthiness and loan terms, including maturity, currency, security, and other relevant parameters.

      Contact

      Gaukhar Mukasheva
      Gaukhar Mukasheva

      Director, Head of Transfer Pricing, Tax & Legal

      KPMG Caucasus and Central Asia