Eman F Ahmed Attia
The Rationalization of Accounting Strategies to Resolve Conflicts of International Transfers and Charges of Multinational Companies
This paper mainly investigated the effect of Electronic Commerce (EC) on Multinational Enterprises (MNEs) transfer price. Not long ago, transfer pricing was a subject for tax administrators. But recently, politicians, economists and business men, as well as tax authorities, are realizing the importance of who pays taxes on international business transactions between different arms of the same corporation. The reasons of this importance are globalization, the growth of MNEs, and the emergence of EC. The research studied MNE characteristics and transfer price strategies and the influence of EC on both the MNE and transfer price. Also, it investigates EC effects on taxes and whether tax regulations and transfer price methods are applicable for EC transactions not. The theoretical and empirical study verifies that there are problems in the application of current transfer price methods for EC transactions and MNEs use transfer price to reduce its tax liability. In addition to, there are some legal loops in taxing EC transactions that have negative effect on tax revenue. The researcher distribute a questionnaire to 80 MNEs operating in Egypt, conducting interviews with some tax inspectors to show EC impact on tax proceedes as well as transfer price problems. Also, the paper studies the Egyptian environment concerning transfer price and EC. Keywords: Transfer price, Multinational Enterprises, Electronic Commerce, Tax problems.