A Multinational Enterprise (MNE) usually operates with related companies or branches around the world. Under the current international corporate tax system, transfer pricing rules are used to allocate profits (losses) to such related companies or branches.
Transfer pricing rules continue to be a crucial focus area for MNEs as a result of the Base Erosion & Profit Shifting (BEPS) project. This is mainly due to the fact that countries are strengthening their existing transfer pricing policy and practice. Furthermore, the number of disputes between taxpayers and tax administrations in this area are rapidly increasing. Moreover, the importance of this field has been reiterated in the current debate pertaining to the OECD/G20 Two-Pillar solution to address the tax challenges arising from the digitalization of the economy.