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Assessing Transfer Pricing Risk in the Mining Industry How BEPS Is Changing the Landscape. Mining companies have global operations and face unique tax challenges from a transfer pricing perspective. With the introduction of the OECD/G20s Base Erosion and Profit Shifting (BEPS) Project in
transfer pricing compliance in the mining sector. For guidance on how to adjust foreign comparable data for country and taxpayer conditions and risks, tax authorities should refer to a toolkit for Addressing Difficulties in Accessing Comparables Data for Transfer Pricing Analyses
However, transfer pricing can become abusive when the related parties distort the price of a transaction outside an arms length value to make higher profits in lower-taxed jurisdictions and lower profits in higher-taxed ones, as a means of reducing the MNEs overall tax bill.
Mar 02, 2017 Part A (The mining industry and transfer pricing) identifies what are the most common transfer pricing issues in mining in general and where they are likely to occur along the mining value chain. Part B (The mining industry in Africa and transfer pricing) considers the same issues specifically in the context of the main commodities currently ...
Dec 27, 2017 In Tanzania, for example, the Acasia Mining Plc. was recently issued a USD 190 billion tax bill. The assessment demonstrates a strong political will in Africa to address transfer pricing non-compliance. A paper commissioned by the World Bank highlights transfer pricing issues within the African Mining industry.
Accessing Comparables Data for Transfer Pricing Analyses Including a supplementary report on Addressing the Information Gaps on Prices of Minerals Sold in an Intermediate Form International Monetary Fund (IMF) ... BUILDING AN UNDERSTANDING OF THE MINING SECTOR ...
Dec 04, 2017 Authorities can identify and assess transfer pricing risks in the mining sector, select the most high-risk cases for audit, and protect the mining tax base against profit shifting. The toolkit addresses for instance the use of offshore marketing hubs cases where a mine sells its product to a related company that then on-sells to a final customer.
Feb 03, 2020 The mining industry breathed a sigh of relief when the OECD Secretariat Proposal document released in October 2019 (OECD Secretariat Proposal) assumed that extractive industries and commodities would not be subject to the new tax approach being proposed under Pillar One. 1 As eluded to, Pillar One seeks to reset the nexus rules that have been the basis of the international tax system for ...
Transfer Pricing Challenges mining companies face. The mining industry poses some very specific challenges from a transfer pricing point of view. South African mining groups are often involved at more than one level in the supply chain. For example, the group may both mine and beneficiate the
Aug 30, 2021 The training on transfer pricing risk assessment in the mining sector was very useful and practical, reflecting actual issues encountered by auditors. - Ignatius Mvula, Head of the Mining Audit Unit, Zambia Revenue Authority
Mar 18, 2021 As a result of the mining tax audit capacity building initiatives, the Mongolian Tax Administration issued its first transfer pricing tax assessment in late 2020 for approximately USD 228 million and a denial of USD 1.5 billion in carried forward losses.
Practical guidance and tools to counter BEPS in mining. Some topics include excessive interest deductions, transfer pricing, tax incentives. NEW New partnership with the African Tax Administration Forum, ISLP, and the UN Subcommittee for Extractive Industry Taxation
Sep 28, 2017 Authorities can identify and assess transfer pricing risks in the mining sector, select the most high-risk cases for audit, and protect the mining tax base against profit shifting.
Transfer Pricing in the Mining Sector Preventing Loss of Income Tax Revenue principle, and recommends that tax authorities ensure that companies use the method that is the most appropriate to each transaction with an affiliated party, given available data. Some of the five methods are based on
Feb 13, 2018 Recent developments show that the GRA is currently implementing the transfer pricing regulations through conducting transfer pricing audit of some industries of which the extractive industry is included. As a member of the ATAF, it is expected that the GRA would tailor its approach to TP audits in the mining sector and intensify such audits.
Based on the ongoing work on BEPS, the IGF (Intergovernmental Forum on Mining) and OECD has released guidance for source countries on transfer pricing in the mining sector. The transfer pricing and tax avoidance issues identified in the sector are 1. Excessive Interest Deductions. Companies may use related-party debt to shift profit offshore ...
mining sector Note The nancial data included in this toolkit DO NOT constitute comparable data. Do not use it as basis for transfer pricing adjustments. The data is merely intended as an indication of industry practice there may be additional divergences across the industry due
Oct 25, 2018 Based on the ongoing work on BEPS, the IGF (Intergovernmental Forum on Mining) and OECD has released guidance for source countries on transfer pricing in the mining sector. The transfer pricing and tax avoidance issues identified in the sector are 1. Excessive Interest Deductions. Companies may use related-party debt to shift profit offshore ...
Transfer Pricing in the Mining Sector in Zambia lack of transfer pricing regulation has not prevented the ZRA from applying Section 97. The only challenge has been accessing the relevant documentation from mining companies, hence the emphasis on documentation rules in the draft regulations.
The transfer pricing manipulation problem is characterised by Multinational Enterprises (MNEs) who are centred to operate as strategic business entities. This problem has become even more serious as many companies have subsidiaries extended all over
Since 2019, the OECD and others have worked with the Mongolian tax administration to strengthen revenue collection from the extractives sector. As a result of mining tax audit capacity-building initiatives, the Mongolian tax administration issued its first transfer pricing tax assessment in late
Feb 17, 2020 Tax avoidance and illicit financial outflows in the extractive sector largely take place through transfer mispricing arrangements. In principle, transfer pricing is not bad in business, however, when it is used as an aggressive tax planning measure by manipulating the transfer price (mis-pricing) to achieve a tax benefit, it becomes problematic.
Sep 22, 2021 This two-part article highlights the urgent need for West and Central African countries to embrace a wider vision of transfer pricing and tax revenue management, considering the low performance of tax revenue collection in the region, its high dependency on the natural resources sector, and insufficient on-the-ground implementation of transfer pricing measures to levy more tax revenue.
Sep 09, 2021 Transfer Pricing. Taking you from fast-moving complexity to a competitive business advantage. Transfer pricing is a complex area for any business. Changes are fast-paced and regulations are constantly shifting around the world. All organisations are under intense scrutiny.
The result of this study is a number of recommendations that aim to provide guidance on practical steps to strengthen enforcement of transfer pricing rules in the mining sector. The recommendations can be broadly grouped into four categories transfer pricing legal framework, administrative arrangements, knowledge and skills, and information.
This book presents the results of a study on transfer pricing (TP) with specific focus on mining in Africa commissioned in early 2014 by the World Bank Group (WBG) in partnership with the International Mining for Development Centre (IM4DC). The Source Book opens with the Introductory chapter identifying the need for the study and the way it was conducted.
Nov 12, 2020 The Mopani case was one of the first large transfer pricing cases dealt with by the Zambian Revenue Authority. The dispute with Mopani Copper Mining plc was over the pricing of copper it sold to its shareholder company, Glencore International AG located in Switzerland.
Mar 08, 2017 Transfer pricing has emerged as a key area of capacity building for African governments. Responding to this and within the context of the African Mining Vision and the Report of the High Level Panel on Illicit Financial Flows from Africa (the Mbeki Report), the Africa Minerals Development Centre (AMDC) in partnership with the World Bank has commissioned the Mineral and Energy for Development ...
Part A (The mining industry and transfer pricing) identifies what are the most common transfer pricing issues in mining in general and where they are likely to occur along the mining value chain.
Jun 20, 2018 Transfer Pricing Human capacity development program overcoming the challenges of transfer mispricing in the mining sector in Latin America and the Caribbean. 20.06.2018 In taxation and accounting, transfer pricing refers to the rules and methods for pricing transactions within and between enterprises under common ownership or control ...
iii Transfer Pricing in Mining with a Focus on Africa A Briefing Note Summarised by Pietro Guj 1, Stephanie Martin 2, and Alexandra Readhead 3 Executive Summary This briefing note summarises the results of research on transfer pricing (TP) in the specific context of the mining industry in Africa. The study was commissioned in 201516 by the World Bank Group (WBG) in cooperation with the ...
Aug 01, 2018 The minerals policy of Namibia has not considered these views that encapsulate mineral beneficiation and transfer pricing market regulations thus further making arguments for reform within the mining sector. (By Israel Dollo Hauwanga)
May 12, 2021 Dr. McClure has written several articles on various aspects of transfer pricing including the determination of arms length interest rates, arms length royalty rate, and the transfer pricing economics for mining. Dr. McClure taught economics at the graduate and undergraduate level before his
Aug 18, 2021 Workshop on Improving Mining Tax Administration Challenges of Transfer Pricing in Mining The mining sector is a great source of revenues for many countries of the Latin American and Caribbean region. The efficient management of the income from this activity may generate the necessary resources for complying with the responsibilities of the States.
Nov 10, 2017 A toolkit for Transfer Pricing Risk Assessment in the African Mining Industry was launched in September this year by the African Tax Administration Forum (ATAF) at its International Conference on Tax in Africa (ICTA). This toolkit signals the next wave of intensified effort
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