Centralized And Decentralized Models In Transfer Pricing

Transfer pricing between related parties represents one of the fundamental pillars of the international tax system, particularly in light of the continuous expansion of multinational enterprises and the increasing complexity of cross-border transactions. This reality has necessitated the development of clear rules to ensure that such transactions are conducted on fair terms reflecting their true economic value, thereby preventing artificial profit shifting between jurisdictions. Accordingly, transfer pricing has become a central element in international tax policies as a key tool for achieving tax fairness and protecting national tax bases.

In this context, the Organization for Economic Co-operation and Development (OECD) has given significant attention to this area through its Transfer Pricing Guidelines, which establish a comprehensive framework for applying the arm’s length principle as the governing standard for evaluating related-party transactions. Based on these guidelines,