What Your Business Needs to Know
In today’s globalized economy, transfer pricing is no longer just an issue for multinationals—tax authorities are watching more closely, and compliance is under the spotlight like never before. As scrutiny increases, businesses operating across borders—or even locally with group structures—need to ensure their intercompany pricing policies are defensible, transparent, and aligned with regulatory expectations.
At Basil & Alred, we’re helping clients prepare for the new wave of transfer pricing audits, especially in Tanzania and across Africa.
Why Transfer Pricing Is Under the Microscope
Revenue authorities globally are focusing on Base Erosion and Profit Shifting (BEPS)—the practice of shifting profits to low- or no-tax jurisdictions. Transfer pricing, when improperly applied, is a key enabler of BEPS.
In response, tax regulators are trying to,
- Strengthening audit teams and capabilities
- Mandating more robust documentation
- Increasing penalties for non-compliance
In Tanzania, the TRA requires taxpayers with related-party transactions to maintain comprehensive documentation to prove that prices are set at arm’s length.
So; The big question is What Businesses Should Do Right Now?
Identify Related-Party Transactions
Do you transact with a sister company, parent, or overseas affiliate? Whether it’s loans, services, or sale of goods—these must be evaluated for compliance.
Prepare Transfer Pricing Documentation
This includes:
- Master File (global structure, policies, and value chain)
- Local File (specific financial and functional analysis)
- Benchmarking reports that compare your prices to independent companies
Benchmark Your Pricing
Use databases and external comparables to show that your pricing reflects market rates.
Ensure Consistency
Authorities look for patterns. Sudden changes in margins or pricing must be justified with clear economic reasoning.
Disclose Accurately
Ensure your tax returns match your financials and TP documentation. Fill out the transfer pricing disclosure form honestly and thoroughly.
The Risks of Ignoring Transfer Pricing Rules
Failure to comply can result in:
- Hefty penalties and back taxes
- Double taxation if two countries disagree on pricing
- Reputational risk, especially for large or visible companies
At Basil & Alred, we offer:
- Transfer Pricing Risk Reviews
- Documentation preparation and benchmarking
- Audit support if you’ve been flagged
- Ongoing advisory to stay compliant and strategic
Transfer pricing scrutiny is rising—but with the right preparation, your business can remain fully compliant and tax-efficient. Whether you’re a growing SME or an established multinational, now is the time to strengthen your transfer pricing position.