International transfer pricing : a survey of practices, tax-audit, and strategies for managing tax uncertainty by foreign owned subsidiaries in New Zealand
International Transfer Pricing (ITP) tax guidelines and regulations have been recentlyintroduced in New Zealand. These guidelines allow a number of transfer pricing methods.This paper examines international transfer pricing practices of New Zealand basedmultinational companies, the likelihood that these companies would experience a tax-audit by the taxation authority, and the mechanisms these companies use to minimize tax uncertainty. The key findings include that tangible goods is the most common intercompany transfers; cost plus method is the most common transfer pricing method; tax audits by Inland Revenue Department (IRD) are positively associated with company size; the greater the volume of its intercompany transfers, the more likely that a company would have an Advance Pricing Agreement(APA)with the IRD or would consider an APA in the future
