This video is an interview with Sanjay Kumar, a transfer pricing expert who is a former partner at Deloitte and a former commissioner for transfer pricing. The interview discusses transfer pricing, which is the pricing of transactions between related parties.
Important points:
- Transfer pricing is important for safeguarding tax revenue: It helps prevent multinational corporations from shifting profits to low-tax jurisdictions.
- Transfer pricing regulations are based on OECD and UN guidelines: These guidelines provide a framework for countries to develop their own transfer pricing rules.
- Key considerations for transfer pricing regulations:
- Clear definition of related parties and transactions
- Inclusion of all relevant transfer pricing methods
- Detailed guidelines for comparability analysis
- Dispute resolution mechanisms
- Safe harbor rules and advance pricing agreements
- Nepal’s transfer pricing regulations:
- The current regulations need to be more comprehensive and detailed.
- The act should clearly define related parties, transactions, and methods.
- The rules should provide detailed guidance on comparability analysis and other relevant issues.
- Dispute resolution mechanisms should be established to provide certainty to taxpayers.
- Recommendations for Nepal:
- Improve tax administration and create a comprehensive database.
- Digitize tax administration procedures.
- Establish effective dispute resolution mechanisms.
- Prioritize debt and implement debt management strategies.