Question Tag: Multinational Enterprises

Search 500 + past questions and counting.

  • Filter by Professional Bodies

  • Filter by Subject

  • Filter by Series

  • Filter by Topics

  • Filter by Levels

  • 20 Marks

Feb 2020 – L1 – Q4 – Transfer Pricing Principles

Prepare a transfer pricing report for Grape Resort Ltd to determine arm’s length pricing.

The resort industry at Ada in the Greater Accra region of Ghana is extremely popular with foreign tourists due to the Volta estuary, good weather and the range of leisure activities. These attract investments from multinational companies in the resort business. The multinational enterprises dominate the industry at Ada. The multinational enterprises operate over 90% of the resort industry servicing business clients and other travellers. There are smaller enterprises apart from the multinationals in the resort business. Multinational companies operating in the resort industry make use of central booking companies in low tax jurisdictions. These central booking companies are associated companies of the multinational. The central booking companies advertise the resorts in targeted markets, accept bookings for stay at the resorts and conclude the contracts for stay at the resorts.

A recent study by a Non-Government Organization (NGO) revealed that the multinational enterprises in the resort industry in Ghana reported minimal profits or losses for the last years.

Grape Resort Limited is a Ghanaian registered company whilst CPL Resort Limited is a Cayman Island registered company. Sunrise Pleasure Limited and CPL Resort Limited are 100% owned by the Manna Group S.A, a company resident in Austria.

Grape Resort Limited owns, manages and operates a chain of full service resorts at Ada. CPL Resort Limited advertises the resorts, accepts bookings for stay at the resorts, concludes the contracts and receives payments from clients. Special vouchers are then given to the clients. Clients present the special vouchers to Grape Resort Limited in Ada to access their services. CPL Resort Limited pays fees to Grape Resort Limited from the payment it receives from the clients. Some local and foreign clients book, patronize and pay for the resort services directly at the Grape Resort Limited. Grape Resort Limited is among the multinationals that has reported losses from their operation of resorts in Ghana for the last 5 years.

Required:
Prepare a preliminary Transfer Pricing Report for the management of Grape Resort Limited on how to determine the arm’s length price of their products and services in Ghana based on the information you have at your disposal.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "Feb 2020 – L1 – Q4 – Transfer Pricing Principles"

  • 20 Marks

AT- Nov 2022 – L3 – Q4 – Regulatory Environment for Corporate Reporting

Discuss the significance, guiding actions, inconsistencies, compliance areas, and dispute resolution in transfer pricing under Nigeria’s 2018 regulations.

Transfer pricing has become a topical issue in the world of taxation in recent years. This trend is partly driven by the need to prevent fiscal evasion and avoid economic double taxation. Various governments, both in developed and emerging countries, have continued to issue regulations to guide the operations of transfer pricing systems within their jurisdictions.

In Nigeria, the first step toward establishing a legal framework for regulating transfer pricing took place in August 2012, with the enactment of Income Tax (Transfer Pricing) Regulations Number 1, 2012. Due to shortcomings in the implementation of this regulation, it was revoked, and the Income Tax (Transfer Pricing) Regulations 2018 was subsequently enacted.

One critical principle, enshrined in various transfer pricing regulations, that every taxpayer must comply with when dealing with transactions between related entities is the arm’s length principle. This principle has gained significant attention among academics, regulatory institutions, and professionals, with ongoing debate surrounding its application.

Required:

a. Explain the significance of transfer pricing to both the taxpayers and tax authorities. (2 Marks)

b. In complying with the arm’s length principle, discuss two guiding actions which enterprises and multinationals must follow in their intercompany dealings. (3 Marks)

c. Identify and explain four methods multinational companies might use in financial dealings with associated or subsidiary entities that deviate from the arm’s length principle. (6 Marks)

d. In the administration of the Transfer Pricing Regulations 2018, highlight and discuss three fundamental compliance areas for taxpayers and tax practitioners. (6 Marks)

e. Explain the resolution process for disputes that arise between a taxpayer and tax authorities under the Transfer Pricing Regulations 2018. (3 Marks)

(Total: 20 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AT- Nov 2022 – L3 – Q4 – Regulatory Environment for Corporate Reporting"

  • 8 Marks

AT – Nov 2019 – L3 – Q3b – International Taxation

Recommend and justify the most suitable transfer pricing method for Pyrotechnics Ghana Limited.

Pyrotechnics Ghana Limited was established for the main purpose of providing marketing support services to Pyrotechnics UK Limited, its parent company. Pyrotechnics Ghana Limited’s expenses are reimbursed with a 5% mark-up, which constitutes its total revenue.

Required:

What is the best transfer pricing method that can be used to test this transaction? Justify your response and show how the method will be applied.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AT – Nov 2019 – L3 – Q3b – International Taxation"

  • 20 Marks

Feb 2020 – L1 – Q4 – Transfer Pricing Principles

Prepare a transfer pricing report for Grape Resort Ltd to determine arm’s length pricing.

The resort industry at Ada in the Greater Accra region of Ghana is extremely popular with foreign tourists due to the Volta estuary, good weather and the range of leisure activities. These attract investments from multinational companies in the resort business. The multinational enterprises dominate the industry at Ada. The multinational enterprises operate over 90% of the resort industry servicing business clients and other travellers. There are smaller enterprises apart from the multinationals in the resort business. Multinational companies operating in the resort industry make use of central booking companies in low tax jurisdictions. These central booking companies are associated companies of the multinational. The central booking companies advertise the resorts in targeted markets, accept bookings for stay at the resorts and conclude the contracts for stay at the resorts.

A recent study by a Non-Government Organization (NGO) revealed that the multinational enterprises in the resort industry in Ghana reported minimal profits or losses for the last years.

Grape Resort Limited is a Ghanaian registered company whilst CPL Resort Limited is a Cayman Island registered company. Sunrise Pleasure Limited and CPL Resort Limited are 100% owned by the Manna Group S.A, a company resident in Austria.

Grape Resort Limited owns, manages and operates a chain of full service resorts at Ada. CPL Resort Limited advertises the resorts, accepts bookings for stay at the resorts, concludes the contracts and receives payments from clients. Special vouchers are then given to the clients. Clients present the special vouchers to Grape Resort Limited in Ada to access their services. CPL Resort Limited pays fees to Grape Resort Limited from the payment it receives from the clients. Some local and foreign clients book, patronize and pay for the resort services directly at the Grape Resort Limited. Grape Resort Limited is among the multinationals that has reported losses from their operation of resorts in Ghana for the last 5 years.

Required:
Prepare a preliminary Transfer Pricing Report for the management of Grape Resort Limited on how to determine the arm’s length price of their products and services in Ghana based on the information you have at your disposal.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "Feb 2020 – L1 – Q4 – Transfer Pricing Principles"

  • 20 Marks

AT- Nov 2022 – L3 – Q4 – Regulatory Environment for Corporate Reporting

Discuss the significance, guiding actions, inconsistencies, compliance areas, and dispute resolution in transfer pricing under Nigeria’s 2018 regulations.

Transfer pricing has become a topical issue in the world of taxation in recent years. This trend is partly driven by the need to prevent fiscal evasion and avoid economic double taxation. Various governments, both in developed and emerging countries, have continued to issue regulations to guide the operations of transfer pricing systems within their jurisdictions.

In Nigeria, the first step toward establishing a legal framework for regulating transfer pricing took place in August 2012, with the enactment of Income Tax (Transfer Pricing) Regulations Number 1, 2012. Due to shortcomings in the implementation of this regulation, it was revoked, and the Income Tax (Transfer Pricing) Regulations 2018 was subsequently enacted.

One critical principle, enshrined in various transfer pricing regulations, that every taxpayer must comply with when dealing with transactions between related entities is the arm’s length principle. This principle has gained significant attention among academics, regulatory institutions, and professionals, with ongoing debate surrounding its application.

Required:

a. Explain the significance of transfer pricing to both the taxpayers and tax authorities. (2 Marks)

b. In complying with the arm’s length principle, discuss two guiding actions which enterprises and multinationals must follow in their intercompany dealings. (3 Marks)

c. Identify and explain four methods multinational companies might use in financial dealings with associated or subsidiary entities that deviate from the arm’s length principle. (6 Marks)

d. In the administration of the Transfer Pricing Regulations 2018, highlight and discuss three fundamental compliance areas for taxpayers and tax practitioners. (6 Marks)

e. Explain the resolution process for disputes that arise between a taxpayer and tax authorities under the Transfer Pricing Regulations 2018. (3 Marks)

(Total: 20 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AT- Nov 2022 – L3 – Q4 – Regulatory Environment for Corporate Reporting"

  • 8 Marks

AT – Nov 2019 – L3 – Q3b – International Taxation

Recommend and justify the most suitable transfer pricing method for Pyrotechnics Ghana Limited.

Pyrotechnics Ghana Limited was established for the main purpose of providing marketing support services to Pyrotechnics UK Limited, its parent company. Pyrotechnics Ghana Limited’s expenses are reimbursed with a 5% mark-up, which constitutes its total revenue.

Required:

What is the best transfer pricing method that can be used to test this transaction? Justify your response and show how the method will be applied.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AT – Nov 2019 – L3 – Q3b – International Taxation"

knowsia

Elevate your professional expertise across key business domains with our comprehensive training programs

Our offerings

Contact Info

  • +233203701923
    +233543919232
  • info@knowsia.com

Customer

Get In Touch

Follow us on our social media and get daily updates.

Facebook-f Twitter Linkedin-in Envelope
Oops!

This feature is only available in selected plans.

Click here to view all plans

Click on the login button below to login if you’re already subscribed to a plan or click on the upgrade button below to upgrade your current plan.

Login
Upgrade Plan

If you’re not subscribed to a plan, click on the button below to choose a plan

Subscribe to a plan

Pick a Form

Professional Tutor Application Form
Academic Tutor Application Form
Student Tutor Application Form