This report addresses the practical administration of transfer pricing programmes by tax administrations. Technical analysis of how transfer prices should be computed in accordance with the arm’s length principle is outside the scope of this report. Instead the report focuses on the practical experiences of a number of FTA member countries and some non-member countries. The report discusses ways in which the management of transfer pricing programmes can be optimised, so that transfer pricing audits and enquiries are conducted efficiently and in a timely manner, for the benefit of MNEs and tax administrations alike. It is concerned with the practical steps tax administrations need to take to correctly identify transfer pricing cases that merit audit or enquiry and then to progress those cases to as early a conclusion as possible.
This report is the result of work that was commissioned by the Forum on Tax Administration (FTA) and undertaken by a study group led by the United Kingdom. Since its creation in 2002, the FTA has grown to become a unique forum on tax administration for the heads of revenue bodies and their teams from 43 OECD and non-OECD countries.
