Abstract
Transfer pricing has recently gained a prominent highlight in ASEAN countries. Eventhough transfer pricing policy has already been enacted by most of each ASEAN member states, there still exists loopholes – especially involving the transactions of cross border transfer prices. This research paper will discuss and further scrutinize the legal issues constituted by these loopholes, which affect both member states and Multi National Enterprises (“MNEs”) - particularly those associated with deficit tax revenue suffered by the member states, as a result of transfer pricing manipulations conducted by the MNEs. Transfer pricing concealed in the form of crossborder transactions; including but not limited to acquisitions, joint venture, and supply chains - impedes the movement of trade and capital, even catalyzes a tax distortion. Aside from ASEAN member states, MNEs are also being put at a disadvantage – to be subjected to a much greater burden on paying a higher cost of compliance, due to its responsibility to comply with more than one country’s jurisdiction and to have them imposed towards a susceptible double taxation.The result of this study encourages and essentially demonstrates the necessity of ASEAN to leverage a firm legal framework on transfer pricing that emphasizes on the manifestation of ‘arm’s length principle’ in all ASEAN countries’ jurisdictions.
Highlights
The globalized business world has affected the international regime in various aspects, mainly in the field of international trade
Transfer pricing has recently gained a prominent highlight in ASEAN countries
This research paper will discuss and further scrutinize the legal issues constituted by these loopholes, which affect both member states and Multi National Enterprises (“MNEs”) - those associated with deficit tax revenue suffered by the member states, as a result of transfer pricing manipulations conducted by the MNEs
Summary
The globalized business world has affected the international regime in various aspects, mainly in the field of international trade. Jurnal Hukum Internasional an associated enterprise – enterprise that directly or indirectly control or being controlled in the management, control or capital,[1] in which one party one-sidedly control the price; either determining the price lower than the market price and shifting the profit gained to a lower tax jurisdiction; has caused a dissentment between both the MNEs and the government’s involved between the transaction, mainly its national tax authority.[2] such issues should be addressed in a ‘water edge’ isolation[3], but towards a broad international context as a whole This matter, has become a prominent highlight and been brought up to be a huge issue to the world of international tax law, namely transfer pricing. The legal loopholes and evasion caused by transfer pricing, the non-existence of such binding regulations on the transfer pricing has piqued the interest of the author to conduct further research on this matter – believes this paper would become a legal problem solver to the problems or loopholes which may arise in the near future and may benefit the international community as a whole
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
