Title page for ETD etd-03222012-170322
Siwele, Tinyiko Email
Transfer pricing : an analysis of South African income tax legislation
Transfer pricing has become a topical issue in recent years as the number of companies
entering into inter-company transactions with connected persons has increased
significantly. Transfer pricing has been used by companies as a tax avoidance tool as they
shift profits between companies in the same group of companies in an attempt to pay less
taxation. This shifting of profits is achieved by transacting with connected persons at prices
that are not at arm's length.
The study outlines the basic principles of transfer pricing and how it can be used as a tax
avoidance tool in both international and domestic transactions.
As countries around the world have realised the value of taxation revenue losses that have
been incurred due to international transfer pricing not occurring at arm's length prices,
many have implemented legislation to regulate transfer- pricing transactions.
South Africa has joined in with its international counterparts by implementing legislation in
an attempt to regulate transfer pricing. The study aims to analyse South African income
tax legislation and compare it to the income tax legislation in the United Kingdom regarding transfer pricing as well as to transfer pricing guidelines of the OECD.
Although research has been performed on transfer pricing in an international context, this
study aims to further consider whether South African income tax legislation ensures that
domestic transfer pricing transactions occur at arm's length prices. By comparing South
African income tax legislation with that of the United Kingdom, the study aims to determine
whether South African legislation should include a section dealing specifically with domestic transfer pricing as was done in the United Kingdom.
AFRIKAANS : Oordragprysvasstelling het in die afgelope jare 'n aktuele saak geword as gevolg daarvan dat die aantal maatskapye wat in inter-maatskappy onderhandelings deelneem grootliks
vermeerder het. Oordragprysvasstelling word deur maatskappye gebruik as 'n wyse om belasting vry te spring en om wins te skuif tussen maatskappye in dieselfde groep van maatskappye, in 'n poging om minder belasting te betaal. Hierdie proses van die skuif van winste word gedoen deur onderhandelings aan te gaan met verbonde persone en teen pryse wat nie armlengte is nie.
Di� studie skets die basiese beginsels van oordragprysvasstelling en hoe dit gebruik kan
word as 'n wyse om belasting te vermy in beide internasionale en binnelandse onderhandelings.
Aangesien lande dwarsoor die w�reld die waarde van inkomstebelasting verliese besef het, wat as gevolg van internasionale oordragprysvasstelling, wat nie teen armlengte pryse plaasvind nie, het baie van die lande wetgewing ingestel om oordragprysvasstelling onderhandelings te reguleer.
Suid-Afrika het nou by sy internasionale gelykes aangesluit deur wetgewing in te stel in 'n
poging om oordragprysvastelling te reguleer. Die studie poog om die Suid-Afrikaanse
inkomstebelasting wetgewing te analiseer om dit te vergelyk met die inkomstebelasting wetgewing van die Verenigde Koninkryk wat oordragprysvasstelling betref sowel as die
van die Organisasie vir Ekonomiese Samewerking en Ontwikkeling.
Alhoewel navorsing reeds op oordragprysvasstelling uitgevoer is in internasionale verband, poog die studie om verdere aandag aan die kwessie te gee of Suid-Afrikaanse inkomstebelasting wetgewing verseker dat binnelandse oordragprysvasstelling plaasvind
teen armlengte pryse. Deur Suid-Afrikaanse inkomstebelasting wetgewing met die van die
Verenigde Koninkryk te vergelyk, poog die studie om vas te stel of Suid-Afrikaanse wetgewing 'n afdeling moet h� wat spesifiek met binnelandse oordragprysvasstelling soos in die Verenigde Koninkryk gedoen is.
Siwele, T 2011, Transfer pricing : an analysis of South African income tax legislation, MCom dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-03222012-170322