Transfer Pricing

   On the 23rd of January 2013, the Bureau of Internal Revenue (BIR) released Revenue Regulation No. 2-2013 prescribing guidelines in allocating or distributing income and deductions of associated enterprises involved in controlled transactions.

This regulation requires all businesses with related party transactions to maintain documents necessary to prove that these transactions are arm’s length. These regulations apply to cross-border transactions and domestic transactions between associated enterprises.

The Bureau of Interal Revenue (BIR) adopts the “arm’s length princinple” set out under the Organization for Economic Cooperation and Development (OECD). This internationally accepted principle requires that related party transaction should be the same with equivalent independent party transaction, under which pricing of the transaction would reflect the true economic value of the contributions made by the entity in the transaction.

Accountable PH is ready to help you maintain the necessary documentation to comply with this regulation.