TAXATION PRINCIPLES and PLANNING RESEARCH ASSIGNMENT
ISSUE FOR RESEARCH: PROFIT SHIFTING BY USE OF TRANSFER PRICING
Related parties with international transactions are able to shift profits between countries in order to avoid tax. Many bodies such as the OECD, G20 and UN have produced guidelines on appropriate pricing strategies to align profits with the real economic value adding. The most widely adopted approach is the arm’s length principle promoted by the OECD.
You are required to research and prepare a submission on the impact of transfer pricing on tax avoidance. Evaluate efforts by governments to counteract the practice and make recommendations on the best approach.
Your research report should address the following:
1. What is a transfer pricing benefit? Provide an example method.
2. What undesirable tax outcomes result? Include any examples or cases.
Some useful links to assist your research are:
1. OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations 2010
This is available through the Swinburne library online search. Particularly focus on the arm’s length principle and transfer pricing methods.
2. Treasury consultation paper “Income Tax: Cross Border Profit Allocation – Review of Transfer Pricing Rules”.
Note this site has the discussion paper inviting comments prior to enactment of Australia’s current transfer pricing legislation.
STRUCTURE OF WRITTEN SUBMISSION (25%)
Presentation is an important feature of any Research report submission. The following guide to presentation gives a general outline to report writing.
Table of Contents
Executive Summary (should not exceed 300 words)
Introduction and Purpose
? State aims of the research report
? Outline contents of research report
? Sources of data
Body of the Submission
? Analysis and discussion of issues
? Interpretation and discussion of data
? Summary of your analysis and interpretation; findings and results of your work
? Include raw data, charts and tables that are not essential to be included in the body of your report
? Calculations used or referred to Bibliography
? References used
Hi there, Just letting you know that you only need to research and answer in question 1 and 2 only in 1100 words. Please let me know if you need any further details Thank in advance,