The complexities of transfer pricing methods and the role of advance pricing agreements and tax audits in addressing disputes
- Authors: Ndou, Wavhudi
- Date: 2023-10-13
- Subjects: Transfer pricing Taxation Law and legislation South Africa , Advance pricing agreement , Double taxation , Arms-length transactions , Tax auditing , Advance tax ruling , Organisation for Economic Co-operation and Development , United Nations , World Bank
- Language: English
- Type: Academic theses , Master's theses , text
- Identifier: http://hdl.handle.net/10962/419631 , vital:71661
- Description: Base erosion and profit shifting is defined as the use of tax planning strategies by multinational enterprises, often through exploiting gaps and mismatches between the countries in which they operate (OECD, 2021: p. 1). Multinational enterprises exploit these gaps through the use of transfer pricing. Goods and services are exchanged between connected persons or associated enterprises at prices that do not reflect their arm’s length price, in order to shift profits from high tax to low tax jurisdictions. In terms of section 31 of the Income Tax Act, transactions between connected persons or associated enterprises must be reflected at their arm’s length price. Transfer pricing has become an issue due to the difficulties in determining an appropriate arm’s length price. Disputes arise between a taxpayer and a tax administration on the methods to use to determine an appropriate transfer price. The use of Advance Pricing Agreements prevents these disputes from arising and provides tax certainty on the treatment of transactions for both the taxpayer and the tax administration. While the OECD recommends the use of Advance Pricing Agreements as a method to prevent disputes from arising, the OECD also argued that if a country has the resources to conduct an audit, an Advance Pricing Agreement will not lead to increased revenue collection. The research therefore analyses the problems faced in determining an appropriate arm's length price and compares the role that Advance Pricing Agreements and audits play in addressing transfer pricing issues. The possible role of Advance Tax Rulings is also explored, but they are found not to be suitable, except for the most simple transactions. The research applies a legal interpretative, doctrinal research methodology and a qualitative research method. The data comprised of relevant South African tax legislation, OECD Guidelines, the World Bank Handbook, and the UN Manual, together with the writings of acknowledged experts in the field. The study establishes that a proper functioning audit system is crucial to increasing revenue collection once a country implements an Advance Pricing Agreement. The research therefore recommends the adoption of Advance Pricing Agreements in South Africa as a dispute prevention measure. , Thesis (MCom) -- Faculty of Commerce, Accounting, 2023
- Full Text:
- Date Issued: 2023-10-13
- Authors: Ndou, Wavhudi
- Date: 2023-10-13
- Subjects: Transfer pricing Taxation Law and legislation South Africa , Advance pricing agreement , Double taxation , Arms-length transactions , Tax auditing , Advance tax ruling , Organisation for Economic Co-operation and Development , United Nations , World Bank
- Language: English
- Type: Academic theses , Master's theses , text
- Identifier: http://hdl.handle.net/10962/419631 , vital:71661
- Description: Base erosion and profit shifting is defined as the use of tax planning strategies by multinational enterprises, often through exploiting gaps and mismatches between the countries in which they operate (OECD, 2021: p. 1). Multinational enterprises exploit these gaps through the use of transfer pricing. Goods and services are exchanged between connected persons or associated enterprises at prices that do not reflect their arm’s length price, in order to shift profits from high tax to low tax jurisdictions. In terms of section 31 of the Income Tax Act, transactions between connected persons or associated enterprises must be reflected at their arm’s length price. Transfer pricing has become an issue due to the difficulties in determining an appropriate arm’s length price. Disputes arise between a taxpayer and a tax administration on the methods to use to determine an appropriate transfer price. The use of Advance Pricing Agreements prevents these disputes from arising and provides tax certainty on the treatment of transactions for both the taxpayer and the tax administration. While the OECD recommends the use of Advance Pricing Agreements as a method to prevent disputes from arising, the OECD also argued that if a country has the resources to conduct an audit, an Advance Pricing Agreement will not lead to increased revenue collection. The research therefore analyses the problems faced in determining an appropriate arm's length price and compares the role that Advance Pricing Agreements and audits play in addressing transfer pricing issues. The possible role of Advance Tax Rulings is also explored, but they are found not to be suitable, except for the most simple transactions. The research applies a legal interpretative, doctrinal research methodology and a qualitative research method. The data comprised of relevant South African tax legislation, OECD Guidelines, the World Bank Handbook, and the UN Manual, together with the writings of acknowledged experts in the field. The study establishes that a proper functioning audit system is crucial to increasing revenue collection once a country implements an Advance Pricing Agreement. The research therefore recommends the adoption of Advance Pricing Agreements in South Africa as a dispute prevention measure. , Thesis (MCom) -- Faculty of Commerce, Accounting, 2023
- Full Text:
- Date Issued: 2023-10-13
Integration of the new development bank into the international financial architecture
- Chitenderu, Tafadzwa Thelmah
- Authors: Chitenderu, Tafadzwa Thelmah
- Date: 2018
- Subjects: World Bank , International Monetary Fund -- Developing countries Economic development -- International cooperation Financial institutions, International
- Language: English
- Type: Thesis , Doctoral , PhD
- Identifier: http://hdl.handle.net/10948/23924 , vital:30645
- Description: The study looked at the integration of the BRICS New Development Bank into the international financial architecture. In doing so, it made use of an econometric evaluation of the impact of the loans received from the current dominant financial institutions, namely International Monetary Fund (IMF) and the World Bank, on economic growth of ten self-selected African countries. Given the challenges and the failures of the Western dominated funding to African countries, it is important to ensure that the funding approach of the New Development Bank does not resemble that of the current international finance system. Using panel data and quantile regression econometric models on annual data from ten self-selected African countries that are recipients of World Bank and IMF loans from 1994 to 2014, this thesis presents a framework for the integration of the BRICS’ New Development Bank into the global financial architecture. The results obtained shows a negative and statistically significant impact of World Bank loans on Gross Domestic Product of the country under analysis and a positive statistically insignificant impact of IMF loans. Given the existing global financial institutions and the wealth of expertise at their disposal, this thesis concludes that the existing global financial structure cannot be done away with completely but the New Development Bank should rather perform a complementary role in the global finance space. Accordingly, the New Development Bank should champion a ‘post ideological rhetoric’ in the global financial architecture.
- Full Text:
- Date Issued: 2018
- Authors: Chitenderu, Tafadzwa Thelmah
- Date: 2018
- Subjects: World Bank , International Monetary Fund -- Developing countries Economic development -- International cooperation Financial institutions, International
- Language: English
- Type: Thesis , Doctoral , PhD
- Identifier: http://hdl.handle.net/10948/23924 , vital:30645
- Description: The study looked at the integration of the BRICS New Development Bank into the international financial architecture. In doing so, it made use of an econometric evaluation of the impact of the loans received from the current dominant financial institutions, namely International Monetary Fund (IMF) and the World Bank, on economic growth of ten self-selected African countries. Given the challenges and the failures of the Western dominated funding to African countries, it is important to ensure that the funding approach of the New Development Bank does not resemble that of the current international finance system. Using panel data and quantile regression econometric models on annual data from ten self-selected African countries that are recipients of World Bank and IMF loans from 1994 to 2014, this thesis presents a framework for the integration of the BRICS’ New Development Bank into the global financial architecture. The results obtained shows a negative and statistically significant impact of World Bank loans on Gross Domestic Product of the country under analysis and a positive statistically insignificant impact of IMF loans. Given the existing global financial institutions and the wealth of expertise at their disposal, this thesis concludes that the existing global financial structure cannot be done away with completely but the New Development Bank should rather perform a complementary role in the global finance space. Accordingly, the New Development Bank should champion a ‘post ideological rhetoric’ in the global financial architecture.
- Full Text:
- Date Issued: 2018
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