Legal and financial advisory services
Accounting and transfer pricing
Company MLK Ltd. Belgrade, operates as a part of our consulting company, which provides our customers the full set of accounting services including the service of preparing the transfer pricing reports.
MLK Ltd. Belgrade was established in 2009 with the aim of providing operational, legal and financial advisory support to companies in Serbia.
In addition to the accounting and transfer pricing report preparation services, MLK also provides services of companies’ incorporation, liquidation and overall corporate support of our clients.
Transfer pricing report
By the amendments to the Corporate Income Tax Law there has been acceptance of the OECD guidelines in the area of control of transfer prices between related parties.
The transfer price is considered as the price occurring related to transactions of funds or creation of obligations between related parties.
Transactions with related parties are separately stated in the tax balance, as well as interest on deposits, loans, or loans between related parties.
The deadline for filing tax reports is the 30th of June for the financial results of the previous year, while the Law on Tax Procedure and Tax Administration precisely prescribes penalty provisions in the area of transfer pricing.
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Olga Miljanović
- Mob: +381 60 0249 737
- Tel: +381 11 41 41 600
- Fax: +381 11 4141 606
- e-mail : olga.miljanovic@mlk.rs
Types of reports on transfer pricing
Report in abbreviated form
The report in abbreviated form is submitted for transactions with related parties that fill one of the following two conditions:
- that the transaction with a related party in a single year for which the tax balance sheet is submitted is not greater than 8.000.000 RSD
- •that the total value of transactions with a related party in the year for which the tax balance sheet is submitted is not greater than 8.000.000 RSD.
Report on transfer pricing
The report on transfer pricing contains analysis about a group of related parties that belongs to the taxpayer and its activity, as well as the functional analysis with the main aim of choosing methods for checking compliance of transfer prices with prices indetified on the principle of “out of arm lenght”.
In determining the transaction price based on the principle of “out of arm lenght”, the following methods are used:
- method of comparable prices in the market (internal and external comparable price);
- method of cost plus a reasonable profit (method cost plus gross margin);
- the resale price method;
- transactional net margin method;
- method of division of profit;
- any other method by which is possible to determine the price of the transaction based on the principle of “out of arm lenght”.
In determining the transaction price based on the principle of “out of arm lenght” it is used the method that suits the best for the circumstances of the specific case.
Report in the case of loans
For the purposes of detemining the amount of interest that would be based on the principle of “out of arm lenght” calculated in the case of loans among related parties, the Minister of Finance may prescribe interest rates for amounts that will be considered in accordance with the principle of “out of arm lenght”.
On the other hand, the taxpayer has the right to choose any of the general methods for determining the amount of interest rates by the principle of “out of arm lenght”, but once chosen method must be applied to all loans.
Our team, led by the advisor with the official transfer prices report preparation can offer following services:
- Analysis and identification of intercompany business transactions with related parties – assessment of what kind of report the company is obliged to make – this service is provided to clients free of charge,
- Preparation of the report on transfer pricing using data from the Amadeus database that has been accepted by the Serbian Tax Administration,
- Assistance in the preparation and updating of documentation on transfer pricing during the business year,
- Assistance during the examination of accounting documentation by the tax inspection.
Valuation of companies
Our team consists of several experts with years of local and regional experience in the valuation of companies’ equity and assets.
All members of our valuation team have globally recognized CFA license, whereby some individual members of the team are certified and official court appraisers.
Extensive experience our experts have gained primarily at national and regional stock exchange markets, as well as on a number of valuation projects of domestic and regional non-public companies. The purpose of the valuation was different, starting from the valuation of equity for internal needs of management and owners of the company’s through the equity evaluation in order to implement the various bids for sale of the company (including the offer of purchase the minority shareholders shares), to the equity valuation of the bankrupted companies for the needs of the bankruptcy trustee of that company.
As part of this service, we provide a complete service of equity valuation of all companies by applying internationally recognized valuation methodologies, including discounted cash flow method (income approach), net assets method (cost approach) and comparative method (market approach).
Industrial analysis
Complementary to the services of valuation of companies we also offer analysis of complete industries, mostly for the purpose of identifying potential business improvement and defining future business strategies of individual companies and financial institutions that actively participate in the considered industries.
Complete analysis of individual companies and/or complete industries, among other things, also include an analysis of the current situation in the industry, a review of competitors and competitive advantages of each other, regulation that defines the “rules of the game” in the considered industry as well as an analysis of future trends and effects on the further development and competitiveness of the analyzed industry.
Our experienced team of analysts pays special attention to the way in which the results of the analysis are shown to our customers, keeping in mind the great complexity of our findings and the idea that all the data must be effectively presented to the client with clear comments and conclusions of our team which conducted the analysis.
We always point out that our entire independent research opinion and our analysis will always be based on independent thinking, relevant sources, data and methodologies for processing these data.
M&A services
Within the M&A services we offer to our clients a complete list of M&A services including representation of our clients on both the buy side and the sell side of individual assets or equity transactions.
Our team of experts has many years of experience in working with individual investors and companies as well as financial institutions that had previously performed different types of both buy and sell transactions of assets or equity of local and regional companies.
We fully represent our clients in the buying transactions of individual assets or equity of the companies in bankruptcy procedure, including complete sale procedure tracking, preparation of tender and other necessary documentation, negotiations with creditors, representation at the auction, etc.
Purchase of receivables
In cooperation with our partner company Optimum Safety Ltd. Belgrade we actively perform the purchase of overdue receivables and the realization of their more efficient settlement.
Our strategy of purchasing of overdue receivables is turned towards both the financial institutions and to other companies in Serbia, which in its overall portfolio have a certain volume of outstanding and problematic investments and receivables.