When independent parties transact with each other, the conditions of their commercial and financial relations are ordinarily determined by market forces. When associated parties transact with each other, their commercial and financial relations may not be directly affected by external market forces in the same way. Transfer pricing is an agreed framework of principles that seek to recreate the ‘arm’s length’ position between connected persons or associated parties that would have existed had they been independent. The tax authorities in many countries, including Botswana, accept transfer prices only if they are in line with the arm’s length principle.

The globalisation of business models and increasing tax authority focus has elevated transfer pricing to a mainstream priority for companies operating internationally.

At BDO we a have skilled team of tax practitioners, economists and financial analysts who are masters in their fields. The team focuses on reducing threats and increasing opportunities to enhance corporate performance through proactive transfer pricing planning.

The integration of tax accounting and economics is one of the most important attributes of our transfer pricing capabilities. This unified approach enables us to develop and implement transfer pricing methodologies that are analytically sound, flexible to deal with "real world" situations and fully compliant with transfer pricing regulations. Further, this approach ensures a creative and dynamic tax planning process for our clients.