Transfer pricing involves setting and testing prices for transactions between related parties such as companies within the same corporate group to comply with the arm's length principle.

For tax purposes, companies are obliged to prove they follow the arm’s length principle. This requires conducting detailed comparability analyses, including benchmarking studies and setting the out in dedicated transfer pricing documentation. Without such documentation, a company risks disputes with tax authorities and additional taxes and penalties.

BDO AFA has extensive experience in carrying out the necessary analyses and preparing transfer pricing documentation that complies with Bulgarian law, OECD and EU standards.