Transfer Pricing - Nations get tight on tax

by taxvacancies.com, Sunday, 7th February 2010

As a result of the Global Financial Crisis, many nations housing multinational corporations are utilising international tax strategies such as transfer pricing to reduce their budget deficit. Transfer Pricing calculates the profits earned by a company in each of the countries it operates in.

Christian Aid, an organisation concerned with economic effects on LDCs, estimates that governments lose US$160 billion annually as a result of MNCs misapplying the rules when working internationally.

To counter this, governments are becoming more transparent with information sharing, increasing the number of staff and adopting more sophisticated methodologies to monitor and ensure that in-house company transfers are correctly taxed.

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