Post by Edward K Osei on Oct 7, 2010 7:33:42 GMT 4
Transfer Pricing in Comparative Perspective and the Need for Reforms in Ghana
Edward K. Osei
Widener University - Delaware Campus
Transnational Law & Contemporary Problems, Vol. 19, p. 599, 2010
Widener Law School Legal Studies Research Paper No. 10-25
Abstract:
The World and the United States are in the throes of a global economic crisis unseen since the Great Depression. Governments are facing huge budgetary deficits. For instance, the United States budget deficit for 2009 is predicted to be $1.7 trillion dollars. These desperate budgetary situations are forcing governments to introduce or strengthen their transfer pricing guidelines to get their fair share of taxes from multinational enterprises (MNEs). “Transfer pricing” is the price charged by one business entity to another for the provision of goods, services or intangibles, and constitutes the easiest way of relocating income and expenses among entities.” Transfer pricing allocation is the method by which MNEs determine the amount of taxes they owe to the various countries within which they operate.
According to Senator Carl Levin of Michigan, transfer pricing abuses cost the US government about $100 billion dollars annually. It is also estimated that transfer pricing abuses also cost developing countries, including Ghana around $500 billion annually. Ghana, like many developing countries needs tax revenues for development to free its citizens from the vicious cycle of poverty. The Obama administration is concerned about these abusive transfer pricing practices that that it has endorsed a Stop Tax Haven Abuse Act being introduced in Congress by Senator Carl Levin of Michigan and has put this topic on the agenda for the G20 meeting of advanced and developing countries being in London on April 2, 2009.
This paper, using the United States transfer pricing regulations as a backdrop, articulates various mechanisms through which the Ghana tax authorities can reduce transfer pricing abuses by MNEs. Specifically this paper derives lesions and strategies that have worked within the US transfer pricing regime and argues how they can that useful for a developing country like Ghana.
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1675111_code940398.pdf?abstractid=1675111&mirid=2
Edward K. Osei
Widener University - Delaware Campus
Transnational Law & Contemporary Problems, Vol. 19, p. 599, 2010
Widener Law School Legal Studies Research Paper No. 10-25
Abstract:
The World and the United States are in the throes of a global economic crisis unseen since the Great Depression. Governments are facing huge budgetary deficits. For instance, the United States budget deficit for 2009 is predicted to be $1.7 trillion dollars. These desperate budgetary situations are forcing governments to introduce or strengthen their transfer pricing guidelines to get their fair share of taxes from multinational enterprises (MNEs). “Transfer pricing” is the price charged by one business entity to another for the provision of goods, services or intangibles, and constitutes the easiest way of relocating income and expenses among entities.” Transfer pricing allocation is the method by which MNEs determine the amount of taxes they owe to the various countries within which they operate.
According to Senator Carl Levin of Michigan, transfer pricing abuses cost the US government about $100 billion dollars annually. It is also estimated that transfer pricing abuses also cost developing countries, including Ghana around $500 billion annually. Ghana, like many developing countries needs tax revenues for development to free its citizens from the vicious cycle of poverty. The Obama administration is concerned about these abusive transfer pricing practices that that it has endorsed a Stop Tax Haven Abuse Act being introduced in Congress by Senator Carl Levin of Michigan and has put this topic on the agenda for the G20 meeting of advanced and developing countries being in London on April 2, 2009.
This paper, using the United States transfer pricing regulations as a backdrop, articulates various mechanisms through which the Ghana tax authorities can reduce transfer pricing abuses by MNEs. Specifically this paper derives lesions and strategies that have worked within the US transfer pricing regime and argues how they can that useful for a developing country like Ghana.
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1675111_code940398.pdf?abstractid=1675111&mirid=2