051a. Transfer Pricing - Where We Stand - Stocktaking

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Transfer pricing is a topic about which one hears much but understands little. The increasing globalisation of the world economy and complexity of multinational enterprises ensures that the sheer volume of transfer pricing expands every day. The enormous fiscal implications of transfer pricing have unfortunately led to its politicisation in recent years because of increasing doubt on the part of certain major trading nations, such as the United States, that they were receiving their "fair share" of world tax revenue. But even if political pressures were absent, transfer pricing would still not be an exact science. It involves too many imponderables and interrelates directly with business administration, which is judgmental in nature as well. Hence, transfer pricing remains a shifting ground for both taxpayers and revenue