The transfer pricing landscape in Asia is expected to undergo significant changes in the coming years. The rapid rise of multinational corporations (MNCs) operating in Asia and the increasing demand for goods and services in the region is leading to the need for a more sophisticated and harmonized transfer pricing system.
The trend towards greater harmonization of the transfer pricing landscape in Asia is being driven largely by the Organization for Economic Cooperation and Development (OECD) initiatives.The OECD's Base Erosion and Profit Shifting (BEPS) project and its Inclusive Framework on BEPS provide guidance on how to ensure that multinationals operating in the region pay their fair share of taxes.
In addition, many countries in Asia are in the process of implementing transfer pricing regulations that are more in line with the OECD's recommendations. This includes the adoption of laws and regulations on transfer pricing, the introduction of transfer pricing documentation requirements, the establishment of Advance Pricing Agreements (APAs) and Mutual Agreement Procedures (MAPs), and the implementation of Country-by-Country Reporting (CbCR).
These developments are expected to significantly improve the transfer pricing landscape in Asia, creating a level playing field for all multinational corporations operating in the region.
To sum up the transfer pricing landscape in 2023 is like to be characterised by:
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