Transfer prices - the most common mistakes of foreign companies and how to avoid them

📌 When foreign companies establish companies in Serbia, they often face a challenge transfer prices. This term denotes the prices at which transactions are carried out between related parties (parent and subsidiary companies, related legal entities). Their proper application is crucial in order for the business to be compliant with The Income Tax Act and to avoid high fines and tax risks.

The most common mistakes of foreign companies

• Delay in preparation of documentation - many companies wait until the end of the year to start collecting data, which leads to incomplete and inconsistent reports.
• Copying foreign models without local adjustments - transfer prices in Serbia have specific rules that differ from EU or American standards.
• Improper analysis of related parties – sometimes not all related transactions (loans, guarantees, services of parent companies) are reported.
• Focus only on formal compliance - companies submit a report, but without substantial analysis of market conditions and risks.
• Lack of internal records – without clear internal reports, it is difficult to prove that the transactions were in accordance with the "arm's length" principle.

How to avoid mistakes

✅ The best way to avoid mistakes is a systematic and proactive approach:

• Plan documentation throughout the year, not just at the end.
• Align the transfer pricing policy with local legislation and the rules of the Tax Administration.
• Maintain detailed internal documentation and use monthly reporting as a basis for analysis.
• Consult experts for tax planning and preparation of "Local file" and "Master file" documentation.
• Use digital tools to track and archive transactions for greater transparency.

Why is it important?

❗ Tax controls in Serbia increasingly include transfer prices, and fines can be high. In addition to financial risk, companies also face loss of reputation and difficult business operations.

How the VRB Team can help

Our team has over 20 years of experience working with international companies and we specialize in transfer prices. We help clients prepare complete documentation, comply with legal frameworks and implement digital tools for tracking transactions. Our approach is fast, digital and always in accordance with the law.

👉 Contact us today and ensure your business is secure and compliant.