Determination of the taxable income of certain persons from international transactions : transfer pricing.
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Date
2004
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Abstract
Many intra-firm transactions are non-market transactions and therefore lack a
market determined price. A transfer price is the price assigned to such nonmarket
intra-firm transfers. Transfer prices are especially important for
multinational corporations, since a parent company typically has subsidiaries
or branches in other countries and transfers are often made between the
component parts of the multinational.
As the world has become more internationally dependent, these transactions
and the associated transfer prices have come under increased scrutiny. The
fear often expressed by governments is that a multinational corporation may
manipulate transfer prices in order to transfer profits from one country to
another, and thereby affect various government policies. Most notably,
transfer prices can affect the tax revenues of both the home and host country.
A general international consensus is that the appropriate transfer price is the
'arm's length' price. This is the price that would be charged by two unrelated
parties. However, it is often difficult to find such a comparable transaction.
Description
Thesis (M.Com.)-University of KwaZulu-Natal, Durban, 2004.
Keywords
Tax implications--Foreign income., Theses--Accounting.