Multinational Enterprises (MNEs) are being targeted by Revenue
Authorities in a blitz on large businesses involved in cross-border transactions.
This stems from concerns about MNEs booking profits in foreign jurisdictions
and not attributing their fair share of profits, and hence tax, to the
jurisdiction where value is created.
Rapid advancement in technology, transportation and communication have given
rise to a large number of multinational enterprises (MNEs) which
have the flexibility to place their enterprises and activities anywhere in the world.
Hence it follows that a significant volume of global trade nowadays consists of international transfer of
goods and services
capital (such as money) and
intangibles (such as intelectual property)
within an MNE group. Such transfers
are called “intra-group” transactions.
There is evidence that
intra-group trade is growing steadily and arguably accounts for more
than 30 percent of all international transactions.