Tuffias Sandberg strive to simplify the challenges businesses face. Due to the ever changing legislative, regulatory and tax developments throughout the world around cross border financial transactions it is imperative that your business stays compliant. Understanding the effect of these developments on business operations and transactions between countries is vital.
Transfer pricing is a significant tax issue for multinationals transacting cross-border with related parties.
Transfer pricing generally relates to all intercompany transactions. In South Africa, the transfer pricing legislation applies to all cross-border intercompany transactions between connected parties which generally means where there is at least a 20% shareholding. It would need to be supported to Revenue Authorities across the globe that pricing is market-related. The recent implementation of Country by Country reporting creates greater visibility to tax authorities across the world on the activities, size, financial and tax position of companies within the Multinational Entity Group.