Original Research

Transfer pricing as strategic planning tool for multinational enterprises in a post-isolation South Africa

Petri Schutte, Jozua Loots
South African Journal of Economic and Management Sciences | Vol 5, No 3 | a2748 | DOI: https://doi.org/10.4102/sajems.v5i3.2748 | © 2018 Petri Schutte, Jozua Loots | This work is licensed under CC Attribution 4.0
Submitted: 06 August 2018 | Published: 30 September 2002

About the author(s)

Petri Schutte, Potchefstroom Business School, Potchefstroom University for Christian Higher Education, South Africa
Jozua Loots, Tax Services, KPMG, South Africa

Full Text:

PDF (1MB)

Abstract

Political and trade liberalisation leads to irrevocable change, exposing South Africa to the demands of the dynamic global market, driven by a deluge of competitive forces, demanding world-class, global competitiveness. The challenge facing South African organisations is to successfully transform in an economy undergoing structural change, moving away from import substitution to global competitiveness. Historically, stringent exchange controls prevented profits to emigrate from South Africa. Trade liberalisation necessitates the introduction of transfer pricing legislation to protect the national tax base. Application of transfer pricing in practice is complex, information constraints compel the use of foreign comparables in determining a reward consistent with the arm's length standard, challenging objectiveness and risk adjustment. Strategic opportunities exist if transfer pricing is not entrenched in national regulation compliance.

Keywords

No related keywords in the metadata.

Metrics

Total abstract views: 1232
Total article views: 474


Crossref Citations

No related citations found.