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.

The fight against international transfer pricing abuses: a recommendation for Mauritius

2019 ◽  
Vol 61 (1) ◽  
pp. 205-231 ◽  
Author(s):  
Ambareen Beebeejaun
Keyword(s):  
South Africa ◽  
Multinational Enterprises ◽  
Transfer Pricing ◽  
Tax Avoidance ◽  
Legal Framework ◽  
Content Type ◽  
Legal Provisions ◽  
Transfer Prices ◽  
To Come ◽  
A Minor

Purpose One of the most common forms of international tax avoidance is transfer pricing by multinational enterprises. The research will investigate on the factors that contribute to transfer pricing abuses. At present, there is no substantial and extensive transfer pricing rule in Mauritius. This paper aims to analyse the legal approaches to tackle transfer pricing issues that are undertaken by some countries whose taxation regime is similar to Mauritius. The selected countries are South Africa and UK. The objective behind the comparative study is to come up with the appropriate preventive and corrective measures for Mauritius. Design/methodology/approach The methodology adopted for this research consists of a critical analysis and comparative legal review of the relevant legislation, case law and literature. A minor quantitative analysis of the transfer pricing problem in Mauritius will be conducted, in terms of which interviews will be conducted with officials from different institutions in Mauritius. Findings The study will conclude that the absence of explicit formal rules on transfer pricing allows businesses to use the country to manipulate transfer prices to avoid paying taxes. Therefore, an amendment to Mauritius laws and regulatory framework is required to dissuade multinationals to engage in transfer pricing abuses. The study will conclude that the scope and application of the arm’s length principle needs to be formally set out in legislation and also, the use of Advance Pricing Agreements will also be recommended. Originality/value The research is among the first studies that compare Mauritius legal provisions on transfer pricing with that of South Africa and UK. The research is unique as it intends to provide fruitful recommendation to stakeholders in Mauritius to enhance the existing legal framework on the subject.

scholarly journals Globalization Impact on Multinational Enterprises

World ◽  
2021 ◽  
Vol 2 (2) ◽  
pp. 216-230
Author(s):  
Justine Kyove ◽  
Katerina Streltsova ◽  
Ufuoma Odibo ◽  
Giuseppe T. Cirella
Keyword(s):  
Developing Country ◽  
Multinational Enterprises ◽  
Developed Countries ◽  
Global Market ◽  
Data Availability ◽  
Negative Effects ◽  
Developed Country ◽  
Excellent Starting Point ◽  
Starting Point ◽  
The Impact

The impact of globalization on multinational enterprises was examined from the years 1980 to 2020. A scoping literature review was conducted for a total of 141 articles. Qualitative, quantitative, and mixed typologies were categorized and conclusions were drawn regarding the influence and performance (i.e., positive or negative effects) of globalization. Developed countries show more saturated markets than developing countries that favor developing country multinational enterprises to rely heavily on foreign sales for revenue growth. Developed country multinationals are likely to use more advanced factors of production to create revenue, whereas developing country multinationals are more likely to use less advanced forms. A number of common trends and issues showed corporate social responsibility, emerging markets, political issues, and economic matters as key to global market production. Recommendations signal a strong need for more research that addresses contributive effects in the different economies, starting with the emerging to the developed. Limitations of data availability and inconsistency posed a challenge for this review, yet the use of operationalization, techniques, and analyses from the business literature enabled this study to be an excellent starting point for additional work in the field.

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.

Improved Global Competitiveness on the Basis of New Business Models Influenced by Dynamic Strategic Thinking

2020 ◽  
pp. 271-288
Author(s):  
Drago Dubrovski
Keyword(s):  
Business Models ◽  
Global Market ◽  
Strategic Thinking ◽  
Competitive Advantages ◽  
Current Crisis ◽  
Global Competitiveness ◽  
New Business ◽  
Modern Business ◽  
New Business Models ◽  
A Current

In modern business, dynamic changes in the environment (macro trends) provoke changes within the company. Companies can protect themselves from latent, acute crises. In addition, companies can navigate a turbulent environment while ensuring organizational existence and development. Organizational forms and characteristics, as well as business models to maintain or increase existence and create competitive advantages in the global market, are increasingly sought in a more creative manner. These actions are based on dynamic strategic thinking. Revolutionary methods are often required for the creation and adaptation of competitive business models. The data from companies that face a current crisis show a gap between the need to change business models and the introduction of adapted business models to achieve the desired level of competitiveness.

A Conceptual Model on the Challenges Affecting the Growth, Sustainability, and Survival of Small, Medium, and Micro Enterprise

2021 ◽  
pp. 1-16
Author(s):  
Ayansola Olatunji Ayandibu ◽  
Irrshad Kaseeram ◽  
Elizabeth Oluwakemi Ayandibu
Keyword(s):  
South Africa ◽  
Supply Chain ◽  
Supply Chain Management ◽  
Human Resources ◽  
Conceptual Model ◽  
Human Resources Management ◽  
Global Market ◽  
Chain Management ◽  
Resources Management

This chapter addresses the changes (finance, human resources management, supply chain management, and regulatory) that affect the growth, sustainability, and survival of SMMEs world. These challenges are common among SMMEs in every country. In order for SMMEs to achieve growth, sustainability, as well as survive in the competitive global market, SMMEs must deal with these challenges. This chapter also creates a conceptual model that addresses these challenges and provides solutions that can be used to improve SMME challenges. SMMEs from South Africa, Nigeria, and Ghana were also discussed.

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