Recent international transfer pricing developments and their impact on Malta

Abstract

Transfer Pricing is an important aspect of international taxation and happens whenever two or more associated parties forming part of a Multinational group trade with each other. Transfer Pricing is considered harmful when multinational corporations manipulate and shift profits between jurisdictions in order to minimise or avoid tax. This creates unfair competition between international companies, which are better able to engage in such corporate tax planning strategies, when compared to companies operating domestically. This thesis examines the major international developments on the topic of Transfer Pricing by the OECD under the BEPs Project and the EU, reviews the Transfer Pricing legislation of a selection of countries and Malta, examines the impact of recent Transfer Pricing developments on Maltese taxpayers and tax authorities and sets out factors which Maltese legislators may wish to consider when introducing changes to the local regulation of Transfer Pricing.