FINANCE

DETECTING FRAUDULENT TRANSFER PRICING TECHNIQUES IN TAXATION

by obitaxan

 MANY MULTINATIONAL COMPANIES INVOLVE IN ONE OR MORE TRANSFER PRICING TECHNIQUES.

Transfer pricing involves moving cost from low profit jurisdiction (or related companies) to another high profit jurisdiction(or related companies)  with the aim of  tax reduction.

Below are some ways to detect fraudulent transfer pricing

1. Asking for separate (individual) financials of all the companies in the group and different jurisdiction

2.Compare the respective income and cost in different jurisdictions or related companies

3.See  whether such income triggers the associated cost.

4.See whether the ratio of cost to income is reasonable when compared with  the individual corporate margin.

Tconcept Professional services specialise  in tax and business advisory for more information see www.tconceptpro.com or call +234(0) 8067922530

Disclaimer: Obi Azubuike is not by this publication acting as a professional advisers and therefore not liable to any  damage whatsoever for your acting or refraining to act based on  this publication. Consult your professional for advice. 

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