Transfer Pricing Principles Strive to Strike a Balance Between Interests of Multinationals and Tax Authorities
Amidst the continuing instability within the global economy, the delicate balance between the interests of multinational companies and the tax authorities is as important as ever. Taxand, the world's largest organisation of independent tax advisors to multinational businesses, identifies Transfer Pricing as a crucial area through which to maintain this balance.
With the launch of this year's Taxand / IBFD global transfer pricing guide, which incorporates the official text of the latest OECD Transfer Pricing Guidelines, Taxand recognises the importance of transfer pricing as multinationals seek to maximise tax efficiencies and limit double taxation.
The role of multinationals in world trade continues to increase, as do the complexities associated with managing their operations across multiple jurisdictions. Frequent legislative change - enacted by authorities under pressure to claw back revenues - and the differing regimes of jurisdictions, continue to increase the burden of compliance for multinationals. Yet economies across the globe need to stimulate multinationals' investment and trade activities to encourage upturn. The use of effective Transfer Pricing planning and the clarification of Transfer Pricing rules is becoming more and more important to avoid double or even multiple taxation which can limit the ability of economic growth through international trade and investment.
In this environment it is essential that tax authorities worldwide cooperate to ensure that the taxation of multinationals and the implementation of transfer pricing rules is not viewed in domestic isolation but is addressed in a broad international context.
Antoine Glaize, Global Transfer Pricing Leader at Taxand, commented: "In a global economy, the coordination of tax policy amongst countries serves as the best approach in securing the objectives of both tax authorities and multinationals.
"Within an area as complex as transfer pricing, it is imperative that the international principles chosen by OECD member countries serve the dual objectives of securing appropriate tax bases and avoiding double taxation, thereby minimising conflicts.
"Keeping up to date with transfer pricing regulatory change is a big challenge for all multinationals and Taxand's collaboration with the IBFD gives access to the latest OECD guidelines as well as an overview of the current transfer pricing laws, guidelines and tax authorities' methodologies and practices which we hope acts as a helpful tool in helping multinationals to navigate this complex area."
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