OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations

2009 ◽  
Keyword(s):  
Multinational Enterprises ◽  
Transfer Pricing

Taxes, Transfer Pricing, and The Multinational Enterprise

2009 ◽  
Author(s):  
Lorraine Eden
Keyword(s):  
United States ◽  
Multinational Enterprises ◽  
Transfer Pricing ◽  
Multinational Enterprise ◽  
The United States ◽  
International Taxation ◽  
Complex Issue ◽  
Daunting Task ◽  
National Governments

For more than ten years now, transfer pricing has been the top international taxation issue faced by multinational enterprises (MNEs). This article aims to outline, for the reader, the complex issue of transfer pricing, as seen by MNE managers and by governments faced with the daunting task of taxing business profits. The article is organized as follows. First, it briefly discusses transfer pricing from the MNE's perspective and the problems that this raises for national governments. It then reviews the basic rules of international taxation as they apply to MNE profits. The specific rules and procedures that apply to transfer pricing, as practiced in the United States and recommended by the OECD, are then outlined. It concludes with a discussion of unresolved problems that are likely to plague transfer pricing over the next few years.

scholarly journals Corporate Income Shifting in an Era of Tax Multilateralism: The Impact of Exchange-of-Information Agreements

2021 ◽  
Vol 69 (2) ◽  
pp. 357-389
Author(s):  
Devan Mescall ◽  
Paul Nielsen
Keyword(s):  
Multinational Corporations ◽  
Multinational Enterprises ◽  
Transfer Pricing ◽  
Empirical Studies ◽  
Annual Reports ◽  
Income Shifting ◽  
Exchange Of Information ◽  
Pricing Rules ◽  
Using Data ◽  
The Impact

Using data from the annual reports of over 100,000 subsidiaries of multinational enterprises (MNEs) from 55 countries between 2003 and 2012, the authors of this article investigate the impact of exchange-of-information agreements ("EOI agreements") on tax-motivated income shifting. Transparency created by the signing of EOI agreements is expected to reduce the tax-motivated shifting of income by multinational corporations. Whether such agreements affect the income-shifting behaviour of multinational corporations is an unanswered question. The authors find evidence that, on average, EOI agreements do have an impact on tax-motivated income shifting. Additionally, they find that more advanced, modern EOI agreements are associated with a larger decrease in tax-motivated income shifting compared to the impact of early EOI agreements. This evidence challenges the prevalent assumption in empirical studies that EOI agreements are homogeneous. Supplemental analyses suggest that factors that affect the information asymmetry between MNEs and tax authorities, such as corporations with high levels of intangibles and tax authorities with strong transfer-pricing rules and enforcement, can diminish or enhance the effectiveness of EOI agreements in moderating tax-motivated income shifting. The evidence provided by this study shows that consideration of the tax authorities' information environment and the substance of an EOI agreement is essential when assessing the impact of such an agreement on the tax behaviour of sophisticated taxpayers such as multinational corporations.

scholarly journals Transfer pricing as strategic planning tool for multinational enterprises in a post-isolation South Africa

2002 ◽  
Vol 5 (3) ◽  
pp. 683-710
Author(s):  
Petri Schutte ◽  
Jozua Loots
Keyword(s):  
South Africa ◽  
Multinational Enterprises ◽  
Transfer Pricing ◽  
Import Substitution ◽  
Global Market ◽  
Trade Liberalisation ◽  
Global Competitiveness ◽  
National Regulation ◽  
Length Standard ◽  
National Tax

Political and trade liberalisation leads to irrevocable change, exposing South Africa to the demands of the dynamic global market, driven by a deluge of competitive forces, demanding world-class, global competitiveness. The challenge facing South African organisations is to successfully transform in an economy undergoing structural change, moving away from import substitution to global competitiveness. Historically, stringent exchange controls prevented profits to emigrate from South Africa. Trade liberalisation necessitates the introduction of transfer pricing legislation to protect the national tax base. Application of transfer pricing in practice is complex, information constraints compel the use of foreign comparables in determining a reward consistent with the arm's length standard, challenging objectiveness and risk adjustment. Strategic opportunities exist if transfer pricing is not entrenched in national regulation compliance.

scholarly journals SELECTED CHALLENGES AFFECTING THE RETROACTIVE TRANSFER PRICING ADJUSTMENTS OF IMPORTED GOODS IN SOUTH AFRICA

Obiter ◽  
2021 ◽  
Vol 42 (3) ◽  
Author(s):  
Howard Chitimira ◽  
Oratile Maselwa
Keyword(s):  
South Africa ◽  
Multinational Enterprises ◽  
Transfer Pricing ◽  
Policy Makers ◽  
Overview Analysis ◽  
Regulatory Challenges

The article analyses selected challenges associated with retroactive transfer pricing adjustments of imported goods under the Customs and Excise Act 91 of 1964 (Customs and Excise Act). This is done in order to examine the regulatory challenges affecting retroactive transfer pricing adjustments and customs valuation processes of imported goods under the Customs and Excise Act. Thus, the enforcement of retroactive transfer pricing adjustments of imported goods for Multinational Enterprises (MNEs) is scrutinised in terms of the Customs and Excise Act. To this end, the article provides an overview analysis of selected regulatory and related challenges affecting retroactive transfer pricing adjustments and actual valuation processes of imported goods within different MNEs in South Africa. Accordingly, the article explores selected challenges in order to recommend possible remedies and measures that could be employed by policy makers to enhance the regulatory and enforcement framework under the Customs and Excise Act.

MULTINATIONAL TAX AVOIDANCE AND ANTI-AVOIDANCE ENFORCEMENT: FIRM-LEVEL EVIDENCE FROM DEVELOPING ASEAN COUNTRIES

2020 ◽  
pp. 1-17
Author(s):  
ATHIPHAT MUTHITACHAROEN ◽  
KRISLERT SAMPHANTHARAK
Keyword(s):  
Multinational Enterprises ◽  
Transfer Pricing ◽  
Tax Avoidance ◽  
Manufacturing Firms ◽  
Profit Shifting ◽  
Firm Level ◽  
Level Data ◽  
Firm Level Data ◽  
Avoidance Measures ◽  
Asean Countries

We use firm-level data from ASEAN5 to examine the significance of tax-motivated profit shifting by multinational enterprises and to analyze how anti-avoidance measures mitigate the profit shifting. We show that (1) tax-motivated profit shifting is statistically and economically significant, especially for manufacturing firms, (2) auditing and transfer-pricing scrutiny is more effective in reducing profit shifting than documentation requirement alone and (3) tax-motivated profit shifting is prominent for large firms, while anti-tax avoidance measures result in the absence of profit shifting detected from small manufacturing firms. The findings have important implications for developing countries with weak governance but dependent on MNEs.

The Control of Transfer Pricing of Corporations by Blockchain Technology

2020 ◽  
pp. 377-393
Author(s):  
Habip Demirhan
Keyword(s):  
Public Sector ◽  
Multinational Enterprises ◽  
Driving Forces ◽  
Transfer Pricing ◽  
Economic Structure ◽  
New Approach ◽  
The Public ◽  
Blockchain Technology ◽  
The World ◽  
Cultural Structure

The globalization movements that had emerged in the last century have not only influenced the world's social, political, and cultural structure, but also have influenced its economic structure as well. The globalization of the world economy makes locations and economic units between countries or regions interdependent on one another. The primary driving forces of this process include technological change and multinational enterprises. Thus, intercompany transactions are important for multinational enterprises. In recent years, discussions regarding the applicability of blockchain technology, or more commonly referred to as crypto coins, for the public sector have emerged. This study therefore attempts to explain the applicability of blockchain technology in relation to transfer pricing, and it clarifies (1) how blockchain technology represents a new approach to transfer pricing, (2) how blockchain technology reduces transfer pricing evasion, and (3) how blockchain technology increases both transparency and accountability.

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