Multinationals straddle national boundaries and jurisdictions. When
a multinational transfers goods and services among its companies in different
countries, where are its profits taxed? National tax authorities regularly
challenge prices for transferring goods and services across boundaries and
within the same group of companies. The OECD Transfer Pricing Guidelines
were published in 1995, with updates every year up to 1999. This travel version
contains all that material, but in a compact format that makes it easy to take
out of the office.
These guidelines maintain the arm’s length
principle of treating related enterprises within a multinational group and
affirm traditional transaction methods as the preferred way of implementing the
principle. These controversial issues are not just of interest to tax experts.
National tax administrations, taxpayers and business people alike, all have a
share in avoiding conflicting tax rules which might seriously hamper the
development of world trade. |
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