Transfer Pricing Policy for Bangladesh

Abstract

As Bangladesh tries to increase the level of foreign direct investment, the authorities may formulate a transfer pricing policy to reduce the scope for detrimental profit-shifting activities of transnational corporations. A simple model to illustrate the role of transfer pricing in intra-corporate cross-border trade is presented. It is argued that while Bangladesh's transfer pricing policy should be based on internationally accepted principles, it will have to be suitable to the situation of the country and congruent to the administrative capability of the national tax authorities. Key challenges and further research topics in transfer pricing issues pertaining to Bangladesh are identified and discussed.