Transfer pricing studies

Who is required to file?

A transfer pricing study must be prepared by every legal entity and every sole proprietor keeping business ledgers who had transactions with related parties during the year — sales, services, loans, leases or licences. A related party includes, among others, a person holding 25% or more of the shares or voting rights, a party under common control (the same parent or founder), members of management and close relatives of the owner.

Typical clients from our practice: Serbian LLCs with a foreign parent (development centres and subsidiaries), companies trading with another company owned by the same person, and companies with a loan from their founder.

What the study contains

• Group and industry analysis — who is related to whom and how the business operates.
• Functional analysis — who performs which functions, bears which risks and uses which assets in the transaction.
• Selection of method — in line with Serbian regulations and OECD guidelines.
• Comparability analysis (benchmark) — evidence that the prices fall within an arm's length range.
• Conclusion and adjustments — where prices deviate, a calculation of the adjustment to the tax base.

Full or short-form report?

Where the total value of transactions with a single related party does not exceed RSD 8 million in a year, a short-form report may be filed — a considerably simpler document. Loans and credits are the exception: a short-form report is never available for them, regardless of amount. Assessing which report is sufficient for you is part of our work.

Filing deadline

The study is filed together with the annual tax balance — for legal entities, within 180 days of the end of the tax period. The obligation repeats in every year in which there were related-party transactions.

How we prepare studies

We prepare transfer pricing studies in line with OECD guidelines, for domestic companies and for foreign-owned ones — including IT companies with a foreign parent, where transfer pricing is effectively standard. If we already keep your books we hold most of the data, so the process is quick; we also prepare studies on a standalone basis for companies whose accounting is handled elsewhere.

Frequently asked questions

Who must prepare a transfer pricing study?

Every legal entity and every sole proprietor keeping business ledgers who had transactions with related parties during the year, whether domestic or foreign. A relationship exists where there is a holding of 25% or more of shares or votes, common control or management, or a family connection.

I only have a loan from my founder — do I need a study?

Yes. A loan between related parties is a transaction that must be documented, and the interest — including where the loan is interest-free — is tested against arm's length rates. The short-form report cannot be used for loans and credits.

When is the study filed?

Together with the annual tax balance: for legal entities within 180 days of the end of the tax period, and for sole proprietors keeping ledgers alongside the annual tax return. A study is filed for every year in which related-party transactions took place.

What happens if I do not file it?

Failure to file is an offence carrying monetary penalties, and in an audit the Tax Administration can determine the arm's length price itself and increase your tax base, with interest. The cost of preparing a study is as a rule many times lower than that risk.

Note: this page is informational and does not constitute tax advice.