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Today, as more than 60% of world trade takes place within multinational enterprises, the importance of transfer pricing increases with tax authorities warming up to the phenomenon and rapidly taking steps to place their national revenue interests on the table.
The term "transfer pricing" refers to the valuation of sales and other transactions, loans, investments etc which occur between different arms of the same corporation or business group. A transfer price is the price charged for intercompany transactions within the group. The concept relates not only to trade operations proper, but also to other intra-firm transactions, such as those relating to transfer of technology, dividend remittances, royalties and technical fees payments...
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