Transfer of pricing under Ethiopian Tax Law

ABSTRACT

Globalization and economic growth have driven the level of inter-company transactions to new heights. It’s estimated that more than 2/3 of all business transactions worldwide take place within groups. In particular, developing countries are observing immense growth in intra-group transactions due to the fact that their economies are still in the process of opening up and attracting large amounts of FDI. So, it’s of immense importance to halt challenges posed to both national & world economies through controlled transactions. In this paper, I briefly discussed the conceptual introduction of transfer pricing, arm’s length principle, transfer pricing methods recognized under OECD & UN transfer pricing guidelines, and Ethiopian tax law.  Finally, I tried to address whether Ethiopian Transfer pricing law & regulation accords or contradict with OECD & UN transfer pricing manual