Are current Transfer Pricing Documentation and Regulation enough to prevent artificial Transfer Pricing and related issues?

Details

Supervisors

Gérard, Marcel

Faculty

Louvain School of Management

Degree label

Master [120] en sciences de gestion

Abstract

In a world where money and power become increasingly important, firms, especially multinationals enterprises (MNE’s), are trying everything to increase their income and reduce their expenses, in order to minimise their cost and maximise their profits and to secure survival and even promote future growth. Enterprises developed sophisticated tax planning methods aimed to shift profits in order to erode the taxable base. The aim of this thesis is to demonstrate the importance and the impacts of transfer pricing concerning taxation. First, we will analyse a plan developed by the OECD to avoid BEPS, including transfer pricing issues. In the second part, we will analyse two European countries, notably Belgium and Luxembourg and their proceeding in this matter. The goal will be to prove that existing transfer pricing regulation, with further consideration of Belgian and Luxembourgish law, does not effectively prevent artificial transfer prices and to cite reasons for this phenomenon. Moreover, we will try to give the solutions that could improve international regulation regarding its transfer pricing regulation.