CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Report Proposes African Transfer Pricing Improvements

Report Proposes African Transfer Pricing Improvements

by Lorys Charalambous, Tax-News.com, Cyprus

19 July 2016


The National Resource Governance Institute has released a paper that looks at African nations' efforts to introduce transfer pricing rules in the mining sector and puts forward policy recommendations.

The study assesses the development and implementation of rules to monitor transfer pricing in the mining sector in countries with varied experiences, looking more in-depth at Ghana, Guinea, Sierra Leone, Tanzania, and Zambia.

The paper says that introducing the concept of the arm's length principle in an income tax law is only a first step. It points out that few countries have followed up with regulations, administrative guidance, or company-specific advance pricing agreements to clarify documentation requirements and methods for determining an acceptable transfer price based on the arm's length principle.

Further, the NRGI paper said that laws or contracts that impose taxes on the mining sector do not always refer to generally applicable transfer pricing rules, leaving an ambiguity that could be exploited by, or lead to disputes with, mining companies.

A lack of expertise in tax authorities is seen as a major issue holding back transfer pricing enforcement. However, contrary to recommendations from international organizations, the paper recommended that establishing a dedicated transfer pricing unit may not be appropriate for all African states and in particular for developing countries with limited resources.

Instead it said that countries should look to focus audits on those that are the highest transfer pricing risk. It therefore called for territories to improve their transfer pricing risk management frameworks to decide which risks warrant an audit. Last, the paper says the country should ensure that their tax officials are adequately trained and should improve inter-agency cooperation particularly on audits.

TAGS: compliance | africa | tax | investment | business | tax compliance | tax avoidance | mining | law | enforcement | agreements | multinationals | legislation | tax planning | transfer pricing | Guinea | Sierra Leone | Zambia | tax reform | trade | Ghana | Tanzania | BEPS

To see today's news, click here.

 






Close

Password Reminder

Please enter your email address to receive a password reminder.

 






Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Tax-News+ Updates

Receive FREE daily updates from Tax-News.com, straight to your inbox. Register Now!

For a tailored solution, choose to receive selected news updates for your preferred jurisdictions and topics, with our enhanced Tax-News+ subscriber service. Read more...

 

Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »