... obvious benefits of globalisation are accompanied by a growing complexity in the process of managing multinational corporations (MNCs hereafter) and taxing them. Flows of raw materials, products in process, goods, services and intangibles surround the globe, influencing the everyday life of every one of us. These flows have an interesting characteristic: Allegedly more than 60 % of their volume occurs within MNCs (Owens, 1996) - as intra-firm trade - and as such influence the balance inside the MNC. The prices used in these transactions determine the profits of the mother company and its subsidiaries, influencing trade balances, employment, exchange rates of currencies and not least tax collections. With the gradual growth of world trade, the opening and expansion of markets, and the growing trend of M&As, we can expect the effects of intra firm transactions, and thereby Transfer Pricing (TP hereafter), to grow in the future. MNCs are increasingly ...

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