Challenges of applying the comparability analysis in curtailing transfer pricing: evaluating the suitability of some alternative approaches in Africa

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dc.contributor.author Oguttu, Annet Wanyana
dc.date.accessioned 2021-11-16T13:20:48Z
dc.date.available 2021-11-16T13:20:48Z
dc.date.issued 2020
dc.description.abstract This article asserts that transfer pricing is perhaps the greatest profit shifting problem facing the international tax system. Thus, countries have historically been keen on preventing transfer pricing and on finding effective and efficient methods for allocating revenue that are administratively cost effective for both taxpayers and tax administrators. However, the problem as articulated in this article is that the comparability analysis that underpins the application of the arm’s length principle (ALP) which is applied internationally to curb transfer pricing, continues to be a vexing problem for developing countries due to various conceptual, policy, legislative, administrative and capacity challenges in finding comparable data. Acknowledging these problems, various international bodies have recommended alternative approaches that are considered simpler and less administratively burdensome, that developing countries may adopt in certain cases so as not to carry out a fully fledged comparability analysis. This article explains the operation of some of these alternative approaches and it evaluates the advantages and drawbacks of each of them. The article provides examples of some African countries that have adopted the alternative approaches and the positions of others that have not adopted these approaches. Recommendations are then provided as regards the competing policy options that countries have to consider when adopting the alternative approaches. It is hoped that the article will be found useful by African tax administrations and policy makers when they consider whether to adopt the alternative approaches. en_ZA
dc.description.department Taxation en_ZA
dc.description.librarian hj2021 en_ZA
dc.description.uri https://www.kluwerlawonline.com/toc.php?pubcode=TAXI en_ZA
dc.identifier.citation Oguttu, A.W. 2020, 'Challenges of applying the comparability analysis in curtailing transfer pricing: evaluating the suitability of some alternative approaches in Africa', Intertax, vol. 48, no. 1, pp. 74-102. en_ZA
dc.identifier.issn 0165-2826
dc.identifier.uri http://hdl.handle.net/2263/82710
dc.language.iso en en_ZA
dc.publisher Kluwer Law International en_ZA
dc.rights © 2020 Kluwer Law International BV, The Netherlands en_ZA
dc.subject Transfer pricing en_ZA
dc.subject Comparability analysis en_ZA
dc.subject Advance pricing agreements en_ZA
dc.subject Safe harbours en_ZA
dc.subject Arm’s length principle en_ZA
dc.subject Low value-adding intra-group services en_ZA
dc.subject Sixth method en_ZA
dc.subject Multinational companies en_ZA
dc.title Challenges of applying the comparability analysis in curtailing transfer pricing: evaluating the suitability of some alternative approaches in Africa en_ZA
dc.type Article en_ZA


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