Why country by country reporting is not compatible with transfer pricing realities

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2026

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Why country by country reporting is not compatible with transfer pricing realities

mining50.jpg

An estimated $110 billion disappeared because of transfer mispricing on the import of crude oil in the EU and US between 2000 and 2010, a recent report from Publish What You Pay (PWYP) Norway said.

The report, as covered by www.tpweek.com, says that companies in the extractive industries are using rogue transfer pricing methods to transfer profits from the source countries to the companies themselves. PWYP, which campaigns for transparency in multinational entities’ financial reporting, also said tax administrations in developing countries rarely have the resources or the ability to check that transfer pricing is in-line with arm’s-length standards.

Country by country reporting (CBCR)

PWYP has put forward a policy proposal for consideration by the EU, which would require multinationals to disclose full financial statements on a per-country basis.

Janine Juggins, global head of tax for Rio Tinto, said she does not think the PWYP report is a fair reflection of the true situation: “It is not possible to accurately quantify the proportion of transfer pricing that is correct versus the proportion that is incorrect, nor would the publication of full financial statements change this conclusion.”

“Many related party transactions take place between countries that have extensive transfer pricing legislation, and transactions with entities in low tax countries will not withstand scrutiny unless supported by the facts,” Juggins added.

Companies in the extractive industries, like all multinationals, are already subject to transfer pricing rules in every operational country that has transfer pricing legislation. They are therefore required to maintain transfer pricing documentation to comply with the relevant laws and to avoid tax penalties, and are subject to tax return filing requirements and tax audits.

To read the rest of the story, visit www.tpweek.com.

more across site & shared bottom lb ros

More from across our site

Magnus Pantzar is set to join as managing director after spending nearly a decade as EQT’s global head of tax
The OECD’s project was up for debate as Matt Williams spoke to ITR following BDO’s tax strategist survey, which uncovered increased complexity and costs among multinationals
Sponsored by Deloitte
Sameer Nurmohamed, partner, Deloitte Legal Canada
Sponsored by Deloitte
George Ankomah, partner, Tax & Regulatory Services, Deloitte Africa (Ghana)
The recent spree of firm mergers and acquisitions proves that geographic scale is the name of the game
The big four spin-off firm becomes Taxand’s second UK member; in other news, Haynes Boone launched a UK tax practice
Sponsored by Deloitte Luxembourg
Jean-Michel Henry and Mona El-Begawi of Deloitte Luxembourg examine the complexities created by timing differences in Luxembourg, EU, and OECD tax regimes
Stephanie Pantelidaki’s economic expertise will give Norton Rose Fulbright’s other teams ‘extra firepower,’ she says
Sponsored by MFA Legal & Tech
Samuel Fernandes de Almeida of MFA Legal & Tech assesses whether Portugal’s 7.5% surcharge on non-residents aligns with the EU’s free movement of capital principle and passes the proportionality test
Sponsored by McCarthy Tétrault
Senior McCarthy Tétrault tax practitioners highlight significant updates and implications for multinationals as Canada’s transfer pricing rules become more closely aligned with OECD guidance
Gift this article