post Thursday October 18, 2012
Ghana’s Parliament adopted transfer pricing regulations, 2012 (L.I.2188), effective from July 27, in order to provide framework for effective transfer pricing application in the country.
The arms-length principle is adopted for the transfer pricing rules. It is permitted to choose the “most appropriate” transfer pricing methods specified by the Instrument, including the comparable uncontrolled price method, the resale price method, the cost plus method, the profit method, and the transactional net margin method. Other methods aside from the above mentioned specified methods are permitted when tax authority agrees that the arm’s-length price cannot be determined using one of the approved methods.
The rules apply to transactions between:
Taxpayers in a controlled relationship;
A permanent establishment and its head office;
A PE and other related branches of the PE;
A taxpayer and another taxpayer who are in an employment relationship.
For transactions involving intangible property, the tax authority in determining the arm’s-length conditions will consider:
The perspective of both the entity transferring and the transferee, including the price a comparable independent person will pay for transfer of that property; and
The usefulness of the intangible property to the transferee’s business.
Source: Ghana Businss News
Image Source: Free Digital Photos
