Defending the benchmarking analysis and the documentation is essential; group agreements and evidence of services actually rendered are decisive. If necessary, the double taxation treaty and the MAP process are brought into play.
Two defences are worth setting up early: your transfer-pricing documentation (the local file, and country-by-country reporting for large groups) is the first line, and an advance pricing agreement can pre-empt the dispute altogether for future years. Contemporaneous evidence that intra-group services were actually rendered is usually what decides the file. The basis for the challenge is Article 13 of the Corporate Tax Law, which frames it as a disguised distribution of profit through transfer pricing — and meeting the documentation obligation fully and on time carries a fifty per cent reduction in the tax-loss penalty.
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