Petroleum Commission to crackdown on transfer pricing

By Sam Edem
Ghana PC
Ghana PC

The Petroleum Commission is to begin a crackdown on companies engaged in transfer pricing in the country’s oil and gas sector.

Transfer pricing - generally frowned at by tax or regulatory authorities, involves the transfer of intellectual property, tangible goods, services, raw materials, loans or other financing transactions at absurd prices with the purposes of outsmarting the system or reducing its tax liabilities and undermines efforts aimed at achieving accountability in the oil & gas sector.

An example is when oil firms pays large sums of money to parent company abroad or related party offshore and consequently, reduce their tax as well as other statutory obligations to their host countries or entities.

Expressing the resolve of the institution to deal with the practice - Chief Executive of the Petroleum Commission, Egbert Faibille Jnr, who issued the warning, noted that they were aware that most foreign companies in joint venture (JV) arrangements engaged in transfer pricing.