oa South African Journal of Economic and Management Sciences - Transfer pricing as strategic planning tool for multinational enterprises in a post- isolation South Africa
|Article Title||Transfer pricing as strategic planning tool for multinational enterprises in a post- isolation South Africa|
|© Publisher:||University of Pretoria|
|Journal||South African Journal of Economic and Management Sciences|
|Affiliations||1 *Potchefstroom Business School, Potchefstroom University for Christian Higher Education **Tax Services, KPMG|
|Publication Date||Sep 2002|
|Pages||683 - 710|
|Keyword(s)||Business, Competitiveness, Exchange controls, F 23, Globalization, International trade, JEL, M 40, Macro-economic strategies, Multinational enterprises, Planning, Risk adjustment, Strategic planning, Strategic planning tools, Trade, Trade liberalization and Transfer pricing|
ISI Social Science
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 liberalization 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.
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