The FINANCIAL — The Investment Climate Advisory Services of the World Bank Group is providing advice to the governments of the South Caucasus to boost investor confidence, improve tax transparency, and protect tax revenues.
This week in Tbilisi, Investment Climate Advisory Services is hosting a week-long seminar for the tax and revenue agencies of the South Caucasus countries. The program focuses on the application of international practices for transfer pricing, which occurs when two related companies – a parent company and a subsidiary, or two subsidiaries controlled by a common parent – trade with each other.
The introduction of transfer pricing rules and the development of administrative capacity can help governments prevent tax evasion, protecting the tax base and fostering an attractive investment climate.
“Globalization brings benefits, in terms of increased global economic wealth, but also poses challenges to ensuring that multinational companies and governments are treated fairly and equitably when transfer pricing creates uncertainty in cross border taxation," said Thomas Lubeck, IFC Regional Manager for the South Caucasus. “This seminar will provide the opportunity to the representatives of tax and revenue agencies to elaborate solutions to the common problems, helping increase efficiency in this area.”
During the seminar, the participants reviewed the Organization for Economic Co-operation and Development (OECD) Transfer Pricing Guidelines, which provide guidance for multinationals and government bodies. The seminar was supported by Ernst & Young, the Institute for Austrian and International Tax Law, and the International Tax and Investment Center.
The seminar was also supported by Austria’s Ministry of Finance and the Netherlands’ Ministry of Foreign Affairs.
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