Transfer pricing investigations could endanger sensitive corporate info

The government's campaign against transfer pricing could lead to company secrets being revealed. According to Puls Biznesu, tax officials, using the so-called comparative method to determine whether prices paid by a firm to its parent company are too high, have to investigate prices paid in similar transactions by other companies. Under the current law, a company is entitled to receive any information that pertains to its tax assessment, and in this case that would include details of the economic activities of its competitors. To cope with the problem, a radical change of regulations would be needed to allow tax officers to evaluate fair prices based on data published in financial reports. "Such changes in tax law would be desirable, as would be the protection of information pertaining to companies under investigation," said Iwona Georgijew-Ciastoa, who deals with transfer pricing for Andersen. (Puls Biznesu, p. 11) M.K.