UN Tax Group to Target Tech in Transfer Pricing Guidance

A United Nations group of tax experts agreed Tuesday to help developing countries tackle improper transfer pricing in the tech sector by drafting new guidance.

Transfer pricing is the valuation of goods and services exchanged within a corporate group. Tax authorities require the transactions to be done as if they were at arm’s-length, to prevent profits, and therefore tax revenue, from going to low-tax jurisdictions.

The risk of profit-shifting among tech companies is growing in developing countries because of the industry’s increased size, according to a proposed plan to write the guidance. Developing countries often lack the resources to fully ...