The course offers students a thorough analysis as to the workings of the Arm’s Length Principal (“ALP”), as set by the OECD in its Transfer Pricing Guidelines (2021). The course will outline how multinationals set their cross border related party transfer prices for goods, services, interest, management fees, and royalties. Accordingly, students will be given a solid grounding in the foundations of transfer pricing method selection and application, as well as the governmental documentation requirements. New Zealand’s specific domestic law transfer pricing provisions, transfer pricing guidelines, and relevant Tax Treaty Articles will also be covered.
The course will then explore some of the key challenges facing the global transfer pricing framework. This will include a review of how multinationals use transfer pricing to shift profits from high tax locations (such as New Zealand) to lower tax locations. The concepts underpinning this issue will be explored, including value creation, delineation, exit and conversion payments, and business restructuring.
Finally, the course will assess the sustainability of the global transfer pricing framework and the future challenges it faces, including the digitisation of the economy. Options for the future development of global income allocation will also be considered.