Groupe Gbaguidi’s Cotonou company sells goods to Gbaguidi Négoce Niger, a sister company in Niamey owned by the same family. Last year it also lent the Niamey company money to buy two trucks. This year the Cotonou company’s turnover passed one billion FCFA. Mahougnon Tossou, the group’s accountant, must now find out whether the company owes the transfer-pricing declaration. If it does, he must list every sale, purchase and loan with the Niamey company. The same steps apply to any business in Benin that belongs to a group with companies in other countries, and to the accountant who keeps its books.

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Who works where

Mahougnon works in the organization space, on the book of the Cotonou company. A client account does the same on its own book from the client space. Both spaces offer the same actions. The declaration covers the companies of the group that the book trades with. In Exowpee they are customers or vendors of the book, marked as related parties. Mahougnon finds the Niamey company among the customers of the Cotonou book with List accounts, filtered on customers and searched by name. He then marks it with Declare a related party:
  • Country: Niger, as a two-letter code (NE).
  • Relation: parent, subsidiary, sister or other. The Niamey company is a sister. “Other” covers a company in a country with a privileged tax regime, even without a link through capital or control.
  • Pricing method, optional: how prices between the two companies are set, among the methods the form lists (comparable market price, resale price, cost plus, net margin, profit split, or another one).
  • Loan, optional: the account of the book that carries a loan with that company, whether it bears interest, and at what rate. Mahougnon names the account where the truck loan is recorded.
When the related party is another company of the same organization, he can also name its book. The Parakou company is one. Mahougnon records it too, but it is not declared, because the declaration covers only parties established outside Benin. He reviews the list with List related parties and View a related party. He corrects a country or a method with Edit a related party, and removes a company that left the group with Remove a related party. Removing it does not touch the customer or vendor itself.

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Answer the questions about the group

The declaration also asks questions that the books cannot answer: the ultimate parent of the group and its country, what the group does, how it sets prices between its companies, its intangible assets, any restructuring, any advance pricing agreement with the tax administration, significant changes and free observations. Mahougnon answers them once per fiscal year with Write the transfer-pricing answers of a year. Each question may stay unanswered. To change them, he uses Replace the transfer-pricing answers of a year. It replaces the whole set, so a question he leaves out is no longer answered. List transfer-pricing answers, View the transfer-pricing answers of a year and Delete the transfer-pricing answers of a year complete the set.

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See whether the declaration is owed

At any time, Mahougnon previews the declaration of a fiscal year with Preview the transfer-pricing declaration. Exowpee computes it from the books at that moment and saves nothing. The preview shows:
  • Whether the declaration is owed: it is when turnover or gross assets reach one billion FCFA and at least one related party is established outside Benin. A book kept in another currency than the CFA franc is not compared with the threshold, and gets no answer.
  • The trade with each related party outside Benin: sales and purchases of the year, excluding VAT and net of credit notes, read from the entries on that party’s accounts.
  • The loans: for each related party with a loan account, the balance at the start of the year, what was lent and repaid during it, and the balance at the end.
  • The written answers of the year.

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File it

Once the year is closed, Mahougnon prepares the filing on the transfer-pricing form, refreshes it if needed and submits it, as for the annual statements (see File annual statements). The filing freezes the declaration as computed. If he changes a declared party or the answers afterwards, the draft is out of date and must be refreshed before it can be submitted. A submitted declaration keeps its own copy and never changes.

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The rules

  • A related party is a customer or vendor that has an account in the book. A third party can be declared once per book.
  • The country is a two-letter code. Parties established in Benin (BJ) are recorded but not declared.
  • The loan account, when given, must be an account of the book that entries can be posted to, and not the loan account of another related party.
  • The other book named for a related party must be the organization or one of its companies, never the book itself. A client account’s book cannot name one.
  • The customer or vendor and the other book of a related party never change. To change them, remove the party and declare it again.
  • A fiscal year has one set of written answers. Replacing them replaces all of them.
  • The preview works on any fiscal year of the book, closed or not. Filing needs a closed year.
  • Changing a declared party or the written answers makes a draft filing of the declaration out of date. Refresh it before submitting.
  • Previewing needs the permissions to list filings, to view accounting reports, to list related parties and to list the written answers.
  • The book must have accounting set up.

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