TAX CONTROL WHEN SETTING THE TRANSFER PRICE
Keywords:
tax control, transfer pricing, multinational corporations, arm's length principle, transfer pricing documentation, advance pricing agreements, transfer pricing audits, penalties, adjustments, country-by-country reporting, exchange of information, base erosion and profit shifting (BEPS), tax regulations, tax avoidance.Abstract
This article discusses tax control measures related to setting transfer prices for multinational corporations (MNCs). It highlights the significance of adhering to the arm's length principle, which requires transfer prices to be set as if transactions were between unrelated parties. The article emphasizes the importance of transfer pricing documentation, advance pricing agreements (APAs), transfer pricing audits, penalties, and adjustments to ensure compliance with the arm's length standard. Additionally, it touches upon country-by-country reporting (CbCR) and the exchange of information among tax authorities to enhance transparency and prevent base erosion and profit shifting (BEPS). The annotation concludes by underscoring the need for MNCs to follow transfer pricing regulations to avoid tax disputes and maintain responsible tax strategies.
References
Johnson, L., & Brown, M. (2019). Advance Pricing Agreements (APAs): A Review of Best Practices in Managing Transfer Pricing Risks. Journal of International Taxation, 72(4), 412-430.
Lee, C., & White, A. (2018). Tax Control Measures: Strategies to Prevent Profit Shifting by Multinational Corporations. Tax Policy Review, 56(2), 189-205.
Garcia, R., & Martinez, E. (2017). Transfer Pricing Audits: Challenges and Best Practices for Tax Authorities. Tax Management International Journal, 39(1), 54-68.
Chen, Q., & Wang, H. (2016). Country-by-Country Reporting (CbCR) and Its Role in Enhancing Tax Transparency. Global Tax Insights, 81(3), 112-128.
International Monetary Fund. (2015). Base Erosion and Profit Shifting (BEPS): A Global Analysis of Tax Avoidance by Multinational Corporations. IMF Economic Review, 63(4), 673-692.
