Transfer Pricing on Trial

About the book

Transfer pricing disputes are won or lost long before court. Drawing on decades of preparing for and arguing transfer pricing trials, including the landmark ABD Ltd v CSARS case in South Africa, Dr Daniel N Erasmus takes you chronologically through the entire dispute lifecycle: from the transfer pricing study and contemporaneous documentation, through the initial tax audit and letter of findings, to giving evidence, expert reports, the trial itself, and the decision whether to appeal.

The book's central argument is that a transfer pricing study, local file or master file is only the starting point. What decides a trial is evidence: documentation that satisfies the rules of evidence, hearsay and its exceptions, business records, the parol evidence rule, and expert testimony that survives cross-examination. Erasmus breaks these rules down for TP specialists who were never schooled in the law of evidence, with practical strategies for managing audits, challenging a revenue authority's procedures, and building a defensible position from day one.

Enriched by experience in courts across South Africa, Zimbabwe, Zambia, Malawi, Tanzania, Nigeria, Ghana and Uganda, the principles draw on English common law and carry practical global applicability. Extensive appendices supply the raw material: post-trial interviews with the two senior advocates from the ABD case, real cross-examination transcripts of expert witnesses, tax risk management and tax steering committee templates, audit engagement guidance, and a specimen advance pricing agreement.

The closing case studies distil hard lessons from some of the most difficult TP trials the author has fought: the burden of proof rests on the taxpayer, substance prevails over form, and inconsistent documentation destroys credibility. Published by the Academy of Tax Law as part of The Tax Intelligence Series, edited by transfer pricing and Pillar 2 advisor Palesa Sansole.

“Many rights that exist in favour of an MNE are lost if not used in time.”Dr Daniel N Erasmus

What you’ll learn

• Why the transfer pricing study is only the starting point, and how to build contemporaneous documentation that will stand as trial evidence
• How to manage the initial tax audit: responding to information requests, engagement letters, letters of findings, and challenging a revenue authority's procedures
• The rules of evidence for tax trials: admissibility, hearsay and its exceptions, business records, parol evidence and the best evidence rule
• How to select, prepare and present expert witnesses, and what real cross-examination transcripts reveal about how their evidence is tested
• How to run the trial itself and weigh an appeal: cost-benefit analysis, constitutional and administrative law avenues, and judicial review
• Lessons from real African case studies: the taxpayer's burden of proof, substance over form, and why revenue authorities cannot dictate business decisions

Inside the book

1. Introduction
2. The transfer pricing study starting point
3. Contemporaneous documentation for audit and trial evidence
4. The initial tax audit
5. The audit findings
6. Giving evidence
7. Expert reports at trial
8. The transfer pricing trial
9. The transfer pricing appeal
10. Recent case law impacting transfer pricing
11. The final chapter