Transfer Pricing

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The report is based on discussion of adopting transfer pricing regime in Bangladesh and needed initiatives for it. In this regard it is necessary first to develop clear perception about the concepts related with the issue. Keeping in view this need this section consists of review of the literature that is focused on how to adopt transfer pricing regime in Bangladesh, what initiatives to follow to adopting transfer pricing regime. The section further unfolds the impacts of transfer pricing regime in Bangladesh and then discusses the trends and current scenario transfer pricing regime in Bangladesh so that with the help of the review of related research works, a picture can be portrayed.

In today’s globalised world, transfer pricing is assuming growing importance both from the perspective of tax agencies which are interested to combat the abusive use of it, and of many of the multinational corporations (MNCs) with cross‐border operations and transactions for which this is becoming a common practice. MNCs are increasingly operating in regions with differentiated taxation systems and diverse regulatory situations. Global trade and trade mispricing are two closely bonded issues; growing volume of global trade has been creating increasing opportunities for trade mispricing. Indeed, the rapid rise of global trade and corporate power offers increasing opportunities for abusive use of transfer pricing (Sikka and Willmott 2010). The use of transfer pricing for tax evasion and tax avoidance is difficult to detect by tax agencies as the schemes of mispricing are carefully designed to outsmart conventional tax scrutiny. Growing incidence of abusive transfer pricing practices and their adverse economy‐wide implications have attracted the attention of many academics1 beyond the accounting discipline; many policy advocacy groups including civil society organisations2 have been seeking more information and actions in view of the emergent situation (Rahman,

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