Multinational transfer pricing and international taxation: what, why, how and reporting challenges

Abstract

International transfer pricing issues are the subject of this paper. The huge
and growing volume of tangible and intangible goods and the motivation
(profit, politics and finance) for manipulations involved in transfer pricing situations makes this an important area of study. Multinational transfer pricing has so much reporting challenges due to the measurement and international taxation complexities. This paper identifies the complexities in the arm’s length measurements and the various loopholes for manipulating transfer prices. It calls for prudence in the measurement and revenue collection process given the vulnerability of subsidiary’s country in loosing  revenue.

Keywords: Transactional Methods, Cost Plus Method, Transfer Pricing,
International Taxation