International Transfer Pricing: The Ethical Perspective
Abstract Litigations arising from issues bordering on transfer mispricing between multinational firms and their host countries have assumed a worrisome dimension in international business. Therefore, there is the need to find a lasting solution to this problem outside of the United Nation (UN), Organisation for Economic Co-operation and Development (OECD) and national guidelines. The focus of this study therefore is to examine the ethics of transfer pricing as an alternative. Library research was conducted and a review of existing literature was done. The qualitative method was adopted with the phenomenological approach to arrive at conclusions. The study reveals that transfer pricing methods though recommended by the OECD, UN and other domestic laws have not reduced the increasing cases of litigations involving transfer pricing. This study concludes that ethical consideration of transfer pricing will be a sure way to reduce transfer mispricing disputes. The study recommends the adoption of ethics in the consideration of transfer pricing methods. Keywords: International Transfer Pricing; Ethics; MNEs; Arm's Length Principle; Transfer Pricing Methods