A proposal to expand the scope of transactions subject to Transfer Pricing to include;
- Transactions as a result of business restructuring/reorganization.
- Transactions related to guarantees, marketable securities, all advance and deferred payments and receivables.
- Transactions related to derivatives.
- Cost-contribution arrangements .
- Transactions related to insurance and reinsurance.
The objectives of this expansion is to deter tax avoidance resulting from profits repatriation therefore resulting to additional compliance requirements for multinational enterprises.
Currently, transactions subject to TP rules in Kenya include;
- Transactions affecting the profit or loss of an enterprise.
- Sale or purchase/lease of tangible and intangible assets.
- Transactions related to lending and borrowing of money.
- Transactions related to service provision.