Transfer Pricing Abuse: the Ghanaian Perspective and the Role of the Accountant in Tax Compliance

Abstract

Transfer Pricing Abuse: the Ghanaian Perspective and the Role of the Accountant in Tax Compliance Emmanuel Budu Addo, Hussein Salia, Abdallah Ali-Nakyea Abstract Advancement in global technology and international trade has facilitated the development of complex business structures within many multinational enterprises (MNEs). Though establishing MNEs has been useful for the development of their host nations such as Ghana, most have adopted aggressive tax planning schemes that enable them to shift profits from one tax jurisdiction to another using Transfer Pricing to achieve their corporate profitability objective. Many nations have been deprived of their genuine tax revenue due to these practices. Governments of these affected nations have thus resorted to introducing measures that require the support of various professionals to ensure intra-company transactions are at arm‟s length. These measures are expected to help prevent mispricing of goods and services and to stop potential tax revenue losses to the states. This paper examines how transfer pricing abuse deprives countries like Ghana of huge tax revenues. It also outlines legislative measures introduced by the government to counteract aggressive tax avoidance schemes employed by the MNEs. It further identifies Chartered Accountants as principal stakeholders, who have roles to play in ensuring effective application of and strict adherence to anti-avoidance legislation in Ghana. The paper advocates for transparency of accounting transactions to enhance compliance with Transfer Pricing regulations. Full Text: PDF DOI: 10.15640/ijat.v5n2a6