The World Bank is stepping up its efforts to clamp down on what it describes as ‘abusive transfer pricing practices’ with a comprehensive handbook on the subject and support for the training of tax officials in less developed markets.

Recent years have seen unprecedented public scrutiny over the transfer pricing practices of multinational enterprises, in particularly in relation to their association with illicit flows of minerals.

New publication

The World Bank says that aggressive tax planning and tax avoidance have become an issue of extensive national and international debate in developed and developing countries alike.

In this context the World Bank has published a transfer pricing handbook called “Transfer Pricing and Developing Economies: A Handbook for Policy Makers and Practitioners.”

Focus areas

The handbook comprises eight chapters and does not purport to be a substitute or an alternative to the existing OECD Guidelines and UN Manual.

Rather, it draws on the practical lessons learned by the World Bank Group and other international organisations in working with governments around the globe to design and implement transfer pricing rules.

Practical challenges

The publication provides technical guidance and country examples to assist policy makers and practitioners with the design, implementation and administration of transfer pricing rules based on international practices.

It also explores the key practical challenges faced and the solutions adopted by developing countries in implementing transfer pricing rules based on international practices, whilst highlighting the importance of providing access to mechanisms for avoiding and resolving transfer pricing disputes.

Training support

The World Bank is also supporting workshops to improve African tax officials’ understanding of transfer pricing issues facing the mineral sector.

Officials recently attended a four-day workshop organised jointly by the African Minerals Development Centre, the Minerals and Energy for Development Alliance and the World Bank.

The workshop focused on skills to assess, prioritise and audit risks associated with transfer pricing and discussed illicit flows in mineral value chains and global mineral production and trade.

Transfer Pricing and Developing Economies: A Handbook for Policy Makers and Practitioners can be found here.

Categories: Trade Based Financial crimes News