Ethiopian Law on Transfer Pricing: A Critical Examination

  • Yosef Alemu


Transfer pricing by multinational corporations is one of the darkest sides of
international investment. Companies transfer large amount of profit untaxed out
of a jurisdiction with the highest tax rate to countries with lowest corporate tax
rate by mispricing their transactions. The OECD and UN came up with model
conventions aimed at tackling this dilemma in member countries. Ethiopia, in its
part, has introduced provisions governing transfer pricing in both the Customs
and Income Tax Proclamations. The Proclamations require related companies to
make their transactions at arm's length. Nonetheless, lack of directives and
absence of comparable data, inter alia, are hindering the application of the laws
on transfer pricing in the country, eventually, resulting in a loss of the very
much needed tax revenue.

How to Cite
Yosef Alemu. (2013). Ethiopian Law on Transfer Pricing: A Critical Examination. Jimma University Journal of Law, 5, 24.