- 10 Marks
AT – May 2020 – L3 – Q2a – Tax administration in Ghana
Explanation of five transfer pricing methods approved by LI 2188 and OECD guidelines.
Question
In July 2012, Ghana introduced new transfer pricing rules and guidelines through Transfer Pricing Regulations, 2012 (LI 2188). The transfer pricing rules require the use of the “most appropriate” method to price related party transactions. Similar to the Organisation for Economic Co-operation and Development (OECD) guidelines, the transfer pricing methods approved by the LI 2188, among others, are:
i) The Comparable Uncontrolled Price method; ii) The Resale Price method; iii) The Cost-Plus method; iv) The Transactional Profit Split method; and the v) Transactional Net Margin Method.
Required: Explain the transfer pricing methods stated above.
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