The explosive growth of international trade in an era of globalisation, together with the fact that two-third or more of that trade is generally

considered to take the form of transactions between associated enterprises, has contributed to the importance of transfer pricing.

Transfer pricing issues have risen to the forefront of international tax concerns as cross-border trade has expanded exponentially.

Transfer prices are the prices at which an enterprise transfers physical goods and intangible property or provides services to associated

enterprises. For managerial purposes transfer pricing may be used by multinational enterprises to measure and evaluate the business

performance of specific individual units of a multinational enterprise.

By evaluating the transfer prices charged for intra-group transactions, a manager can decide whether to buy or sell products and services

internally or externally. This can lead to maximizing the profits of the individual units and of the multinational enterprise as a whole.

From a tax perspective, prices of transactions between related enterprises (transfer prices) are important for both taxpayers and tax

administrations. Transfer prices determine in large part the income and expenses, and therefore the taxable profits of the associated enterprises

in different tax jurisdictions. Any adjustment made by tax authorities to the transfer price in one jurisdiction would cause (economic) double

taxation, seen from the perspective of the multinational enterprise concerned, unless a corresponding adjustment in the other jurisdiction

is made. If the other jurisdiction does not agree to make a corresponding adjustment, the multinational enterprise group will be taxed twice on

this part of its profits. The importance of transfer pricing is recognized by virtually all governments and presents increasingly complex taxation issues for both tax administrations and multinational enterprises. Tax authorities worldwide have instituted regulations requiring enterprises to

document intercompany transactions and comply with the arm’s length principle.


Dwarkasing & Partners helps clients minimize tax risks resulting from transfer prices while optimizing their global supply chains and meeting the requirements of corporate governance. We provide transfer pricing solutions that meet both business objectives and the arm’s length principle imposed by national tax administrations. Dwarkasing and Partners is a full-service consultancy firm. Our professionals utilize market-based pricing techniques including industry structure analyses, benchmarking studies and valuation methodologies to design transfer pricing policies. We have the

expertise to take on complex planning and compliance projects that involve multiple cross-border transactions and provide results that you

can understand, implement and manage.








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