Publication – “Transfer Pricing Is a Financing for Development Issue”

Jomo Kwame Sundaram
FES Perspective, February 2012

Transfer pricing refers to the pricing arrangements for international transactions between related parties –  such as among companies that are members of multinational enterprise. How countries cooperate to ensure fair taxation behaviours by multinationals  of one country in relation to another country is therefore a test of the state of international cooperation on tax matters. When the method used to determine the fair tax owed to a country by a multinational doesn’t reflect the true profits earned in that country, the country is unfairly deprived of revenue  which could go toward development. This excellent publication makes the extremely complex, and therefore arcane subject of transfer pricing understandable to non-experts.

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