Transfer TEST

Ensuring fair taxation and preventing profit shifting through internationally accepted arm's length principles

View the UN Manual

What is Transfer Pricing? 

Transfer pricing is the general term for the pricing of transactions between related or associated enterprises. It should reflect the internationally accepted arm’s length principle embodied in Article 9 of the UN Model Double Taxation Convention between Developed and Developing Countries. 

It is particularly relevant to the global transactions of multinational enterprises, involving the transfer of goods, services and intangibles between enterprises of the multinational groups.

When transactions between associated enterprises do not reflect the arm’s length principle, profits might be shifted to low-tax or no-tax jurisdictions and losses and deductions shifted to high-tax jurisdictions. This can deprive a country of tax revenue and may result in double taxation when tax authorities take different positions

Transfer Pricing is not an exact science. It heavily depends on assessing the facts and circumstances of each case, performing a comparability analysis and interpreting available data. 

Why it Matters

The effective application of transfer pricing rules is key to protecting the tax base of developing countries and their capacity to mobilize domestic resources for SDG Investment

Protecting Tax Base Essential for protecting developing countries' tax base and mobilizing resources for SDG Investment

Arm's Length Principle  Ensures transactions between related entities are priced as if they were between independent parties and prevents double taxation.

Revenue Mobilization Helps developing countries increase tax revenues and combat illicit financial flows.

UN Practical Manual on Transfer Pricing

The signature product of the UN Committee of Experts on International Cooperation in Tax Matters. The 2021 third edition introduces cutting-edge guidance with examples from Brazil, China, India, Kenya, Mexico and South Africa.

Specialized Guidance & Resources

Explore targeted guidance for specific transfer pricing challenges and industry applications

Bilateral Advance Pricing Agreements Comprehensive Framework for establishing advance pricing arrangements between tax authorities Learn More >>	Transfer Pricing Compliance Toolkit Essential Tools and templates for implementing effective transfer pricing compliance programs Explore Toolkit >>	Transfer Pricing During COVID-19 Guidance on addressing transfer pricing challenges arising from the pandemic's economic impact  View Guidance >>
Pharmaceutical Industry Specialized guidance for transfer pricing in pharmaceutical manufacturing and R&D operations Industry Guide >>	Agricultural Products Transfer pricing considerations for agricultural commodities trading and value chain operations Explore More >>	Carbon Credits Trading Framework for transfer pricing in carbon credits and environmental commodity transactions  View Framework >>