The Financial Administration continues to pay significant attention to transfer pricing. Its 2025 annual report describes a new model for risk identification, the ongoing specialization of Financial Administration staff, and an emphasis on the actual operations of group companies. For management, this is a reason to verify whether it has an overview of intra-group transaction risks and sufficient documentation to defend their pricing.
More Targeted Audits
In cooperation with Charles University, the Financial Administration developed a new model for identifying transfer pricing risks, which is intended to contribute to more targeted audits. The preparation of the model also included determining how to utilize data from country-by-country reporting (CbCR). At the same time, the specialization of personnel in transfer pricing continued, along with preparations for closer cooperation across the Financial Administration. In practice, this will mean for companies that the data they already mandatorily report about themselves will be actively used to select entities for tax audits.
Alignment with Reality Is Decisive
During audits in 2025, the Financial Administration emphasized the proper assessment of the functions and risks of individual companies. It also focused more heavily on group restructurings and transactions related to intangible assets.
From our perspective, this underscores the importance of alignment among contracts, transfer pricing documentation (TP documentation), and the actual execution of transactions. Transfer pricing setups must be defensible with regard to the activities performed, decision-making powers, and risks borne. Changes in a company's operations therefore also require a review of existing pricing mechanisms.
What Management Should Verify
- Does pricing correspond to reality? Are contracts and TP documentation in line with the actual course of transactions and the distribution of responsibilities within the group?
- Can the company's results be defended? Are the achieved margins, losses, or significant fluctuations economically explainable and supported by evidence?
- Are documentation materials current and interconnected? Do pricing calculations and economic analyses align with the accounting records and data reported by the company?
- Are group changes assessed in a timely manner? Does the company address the transfer pricing impacts of relocations of activities, changes in the business model, or intangible asset transactions already during their preparation phase?
The Audit as an Opportunity for Early Risk Recognition
Members of the statutory body have a general duty to act with due managerial care. In view of the Financial Administration's approach, this should also include heightened attention to tax risks associated with ongoing intra-group transactions. Company management should therefore understand the transfer pricing setup of these transactions, have documentation to defend the chosen methodology, and be aware of potential risks.
Transfer pricing may also be relevant within the framework of a financial statement audit, particularly if it could impact the financial statements or related tax risks. In this context, the auditor may draw management's attention to areas deserving closer scrutiny. These findings can serve as an impetus for an independent expert assessment of the existing transfer pricing setup.
Would you like to gain a basic overview of transfer pricing risks in your company? Contact your contact team at Grant Thornton or our transfer pricing specialists. As part of an independent assessment, they can review significant intra-group transactions and available documentation with you and recommend further steps.
This text was translated by AI.
