Abstract
Transfer pricing is a pervasive issue that presents significant tax savings potential concerning international enterprises. The authors discuss company incentives to manage transfer prices in an article appearing in the preceding issue of this journal. In response to these incentives, governments have increasingly enacted and enforced domestic restrictions on transfer prices. In this article, contemporary norms restricting transfer pricing are analyzed. The OEGO and US pricing standards are assessed and Brazil's recent application of these standards is considered. Transfer pricing methods are described and evidence of their use is presented. We conclude by describing an intercompany transfer pricing policy intended to facilitate internaI financiaI management and minimize externaI tax threats.
Highlights
RESUMO: Precificação de transferência é um tema muito difundido e que apresenta significativos potenciais de economias de impostos, sobretudo no que se refere a empresas internacionais
Challenges are based on countryspecific restrictions that tend to share common characteristics
We summarize a study on transfer pricing methods used in the US
Summary
RESUMO: Precificação de transferência é um tema muito difundido e que apresenta significativos potenciais de economias de impostos, sobretudo no que se refere a empresas internacionais. As atuais normas que restringem a precificação de transferência são analisadas. Concluímos por meio da descrição das políticas de precificação de transferência entre empresas que têm por finalidade facilitar o gerenciamento interno e minimizar a ameaça das taxações externas. The authors discuss company incentives to manage transfer prices in an artic/e appearing in the preceding issue of this journal. In response to these incentives, governments have increasingly enacted and enforced domestic restrictions on transfer prices. The possibility of minimizing global taxes provides a powerful incentive for multinational enterprises to manipulate transfer prices among related entities as discussed in Limberg, Robinson, and Christians.' As a result, governments are increasingly challenging companies'. We recommend that companies adopt a consistent transfer pricing policy and describe the basic features of such to analyze the general form of these policy
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