With the creation of the Transfer Pricing Subcommittee at the UN, the uncertainty of an increased tax audit of related party transactions by tax administrations in developing countries has arisen.
1. Developing countries
In developing countries, tax authorities often fail to properly audit transfer pricing due to the lack of resources to access all the documentation and uncover those taxpayers with high risk to the Tax Administration.
2. Creation of a Subcommittee for TP at the UN
Consequently, the UN created the Transfer Pricing Subcommittee to help these countries to control the risks of such matters and promote an adequate and more detailed audit in these nations, as in the first world countries.
3. Part of the UN Committee of Experts on International Cooperation
The Transfer Pricing Subcommittee will focus on intercompany transactions in the pharmaceutical industry, which are closely monitored, as well as agreements between companies in agricultural groups. In addition, they will assist developing countries in resolving tax disputes and the economic consequences of COVID-19.
Source: Crossborder.ai 18/05/22