Financial Institutions and Banking

Financial Services Transfer Pricing

NERA economists use advanced analytical techniques to perform differentiating analyses that help multinationals in determining arm's length pricing for financial services firms transactions. The analyses take into account the unique characteristics of regulatory environments in which many financial services firms have to operate, as well as competitive features of markets for financial services using all relevant data sources in the industry. Our capabilities in this field uniquely position us to manage transfer pricing risk and deliver value to our clients.
 
NERA's capabilities span all areas of transfer pricing for financial services firms including structuring of service flows, cost allocation arrangements, asset and equity related valuation, capital structure consideration, and other financing related issues, such as Intra-Group Financing Transactions.
 
NERA economists have a deep understanding of the value creation processes of industry leaders in the Financial Services Sector, including:

• Investment and wealth management
• Insurance
• Banking and capital markets
• Private equity
• Real estate

Through our deep-seated experience and expertise in this sector and the regulatory constraints in which these organizations operate, NERA economists provide sound analyses of intercompany transactions and on appropriate remunerations of the various entities included in the value chain. The transfer pricing specialists collaborate intensively with colleagues within NERA's Securities and Finance Practice.

Our transfer pricing experts notably support clients by:

• Establishing an arm's length basis for rewarding transactions taking into account any provision of ancillary services and the contribution of intangible assets to the value creation process.
• Providing economic and financial analyses of the net compensation paid to key functions within the value chain, as part of a series of cross-border transactions.
• Analyzing and providing economic advice on the overall cross border intra-group pricing system adopted.
• Designing transfer pricing policies in line with the dynamics of the business, the roles and responsibilities of the entities and teams, their functions, assets and risks, and ultimately, their contribution to value creation. 
• Performing the necessary equity and asset related valuations and pricing in the case of organizational restructuring.
• Assisting Multinationals in their communication on transfer pricing. This can include both the preparation of contemporaneous transfer pricing documentation for communication to tax authorities and the preparation of documents for a wider audience inside and outside of the multinational enterprise. Examples are internal communication to a broad internal audience, or to boards, and documentation for external auditors, investors, or workers councils.
• Providing experts specializing in financial economics and transfer pricing to support a taxpayer's position in controversy and negotiations with tax authorities.