Ten years ago, I was sitting across a client of mine that asked a question I am yet to forget. I was advising a Swiss manufacturing multinational on its global operations. It had operations in more that fifty countries and its CFO wanted to know how to ensure that his transfer pricing framework is watertight. ‘I comply with transfer pricing documentation requirements in every country, but in two out of every three jurisdictions, I still go through painful audits, shouldn’t the documentation be enough?’
Those running or working for companies operating across multiple jurisdictions will relate to this question. In Tanzania, we have had transfer pricing regulations for close to a decade now. Yet transfer pricing remains a sticking point for many businesses. There seems to be no guaranteed safety for taxpayers who invest time and effort in a good transfer pricing documentation. If you are wondering why that is the case. Here are some three key points to remember.
Samwel Ndandala is a Senior Manager with Deloitte Consulting Limited. The views presented are his own and not necessarily those of Deloitte. He can be reached at firstname.lastname@example.org