Transfer pricing consultancy services to top demand in SEE region
Which of the countries that you cover in Southeast Europe (SEE) have advanced the most in terms of tax legislation and which ones are lagging behind, and why?
The EU member states in the region have progressed in modernising their tax legislation, and so have some non-EU countries that are implementing some basic EU directives with the aim to comply with the European legislation. In this respect, countries like Cyprus, Bulgaria, Greece, Romania, and Croatia have an advantage and that is why they are a target for foreign investors. Serbia and Montenegro are also business-friendly countries, while Albania is making tremendous progress compared to the past in this respect.
How is Eurofast positioned to compete with other major companies providing the same services in the region?
Eurofast is a regional business advisory organisation employing over 200 people in SEE and the East Mediterranean through fully fledged subsidiaries in Lefkosia, Athens, Thessaloniki, Sofia, Bucharest, Belgrade, Podgorica, Tirana, Skopje, Zagreb, Pristina, Banja Luka, Sarajevo, Cairo, Alexandria, Tbilisi, Kiev, Moscow, Northern Iraq, Lebanon and Beijing.
Our extensive portfolio of service lines gives us the advantage to act as a “one stop shop” for international companies. Eurofast works selectively with independently owned associate companies to offer clients comprehensive and well-rounded solutions for any additional service they require.
What is the outlook for transfer pricing services in SEE?
Good question! Due to the tax Base Erosion and Profit Shifting (BEPS) initiative of the Organisation for Economic Cooperation and Development (OECD), we will have changes to domestic transfer pricing law and regulation throughout the globe, and it is anticipated that transfer pricing services will again be on top of demand in SEE. Let's not forget that in most countries across the region, transfer pricing is a new development. New regulations will increase complexity and will lead to the need for extra services.
Are there any risk indicators for the Bulgarian tax authorities? Are there any differences with other tax authorities in SEE?
High transfer pricing risk areas are usually similar from country to country across the region mainly because the motivation remains the same - “how an entity can minimize its tax liability”. However, in Bulgaria due to low tax rate of 10%, the motivation is not intense. Nevertheless, demand on public services continues to grow in the region as more and more countries strengthen efforts to eliminate such cases. Indicators of high risk areas usually can be found in transactions with tax heavens, transactions with companies that have tax losses for utilization in a multinational organization and material service transactions without substance.
How do you help companies manage their transfer pricing issues and what services do you provide?
In light of the changes in the international tax landscape and due to the reason that one of the key challenges in international taxation is transfer pricing, taxpayers should manage their transfer pricing risks by being aware of key risks. Our solutions include preparation of the transfer pricing documentation, transfer pricing model design, review and localization of the group master file and compliance with each country's law.
Panayiotis Diallinas, Director Regional Operations, involved in the development of the Group’s business in the wide Balkan Region
Anastasia Sagianni, head of the Eurofast Transfer Pricing division, now leading Eurofast TP team in SEE