ATI webinar series on good practices in combatting abusive transfer pricing

The Addis Tax Initiative (ATI) under Consultative Group 3 is launching a new webinar series on good practices in combatting abusive transfer pricing. The series will provide a platform for tax administrations to exchange practical experiences, share lessons learned, and discuss approaches to address abusive transfer pricing in a more effective and consistent way.

Background

Transfer pricing is central to how multinational enterprises allocate taxable profits across countries, with direct implications for domestic revenue mobilisation (DRM). In recent years, the growing use of complex intra-group transactions - particularly involving intangibles, intra-group financing, and integrated value chains - has increased the risk of profit misallocation and base erosion. When transfer prices do not follow the arm’s length principle, profits may be shifted away from where real economic activity takes place, which can weaken tax systems and reduce public revenues. These challenges are particularly relevant for developing countries, where limited administrative capacity, information gaps, and restricted access to comparable data can make enforcement more difficult.

Responding to these issues requires strong technical capacity, clear legal and administrative frameworks, and consistent application of audit approaches aligned with international standards. At the same time, well-designed and predictable transfer pricing regimes can support investment by reducing uncertainty, limiting disputes, and improving compliance for multinational enterprises. In this context, the Addis Tax Initiative (ATI) underlines the importance of sharing good practices among tax administrations in partner countries. Greater exchange of experience can help narrow the gap between increasingly complex tax planning strategies and the capacity of tax authorities, improve consistency in enforcement, support the development of case law and administrative practice, and allow for more targeted use of resources in high-risk cases.

This need was highlighted in a recent ATI webinar held in November 2025 in collaboration with the Zambia Revenue Authority (ZRA), titled Landmark Transfer Pricing Ruling: Lessons from the Zambia Revenue Authority vs. Nestlé Zambia Case. During this session, the ZRA presented key lessons on how tax administrations can challenge abusive transfer pricing practices, drawing on principles reflected in the OECD Transfer Pricing Guidelines, including the burden of proof, the use of comparables, and transaction aggregation. The case also illustrated the practical impact of such enforcement efforts, resulting in an additional tax liability of USD 3.5 million.

Under Action 3 of the Seville Declaration on DRM, ATI members commit to “apply coherent and coordinated policies that foster DRM and combat tax related illicit financial flows (IFFs)”, with an emphasis on strengthening enforcement capacity through robust legal frameworks, risk-based approaches, and improved coordination among tax administrations to address cross-border tax risks more effectively and consistently. In line with this commitment, ATI members recognise transfer pricing as a key area where additional support to partner countries is needed. Against this background, the ATI is continuing its peer learning work by organising this webinar series, which focuses on audit practices and strategies to address abusive transfer pricing arrangements.

Objectives

• Share concrete examples from tax authorities that show how abusive transfer pricing has been identified and addressed in practice.
• Draw out practical lessons from these cases, including on legal and policy frameworks, institutional set-up, methods, use of data, audit work, and dispute resolution.
• Provide practical insights and guidance for ATI partner countries to strengthen domestic revenue mobilisation (DRM), address tax-related illicit financial flows (IFFs), and improve the effectiveness and transparency of tax systems, while also making participants aware of available technical assistance and capacity-building support.

Format and target audience 

The webinar series will consist of at least three online sessions held on separate dates. The events will take place on the MS Teams platform and the floor language will be English with simultaneous interpretation into French. Each session will focus on one country case study, looking at the audit context, transfer pricing approach used, methods applied, results achieved, and key lessons learned. In this sense, all sessions will be based on concrete cases with clear results and will be documented to capture key takeaways for wider use and sharing.

The series will bring together staff from tax administrations, especially those working on transfer pricing, risk assessment, audit and investigation, legal and litigation, and international taxation. It will also include ATI development partners, supporting organisations, and other relevant stakeholders invited by ATI members.

Country cases

#1 A case fROM India | ANDHRA paper v. acit | south centre

The first case study of the series is India, one of South Centre’s Member Countries. The case, Andhra Paper Limited v. ACIT (I.T.A. No. 349/VIZ/2024), involves base-eroding payments via royalties, namely trademark payments made to connected entities without reasonable; value-creating grounds. 

The assessed transactions of the company at hand, a pulp and paper manufacturer, cover the FY 19/20 and have been resolved definitively in December 2025, with the judiciary upholding the initial transfer pricing assessment – which reduced the payment to nil due to incomparability of comparable companies provided and choice of method; lack of commercial benefit obtained under the license agreement as well as failure to provide a comprehensive value chain analysis to substantiate the arm’s length principle. 

Event page | Programme | Presentation 

During the session on 2 July 2026, Anne Wanyagathi Maina, Research Consultant on Tax at the South Centre, presented the case, which was moderated by Fanwell Chibwe, Assistant Director for Litigation and Corporate Advisory at the Zambia Revenue Authority.

The discussion highlighted key lessons for transfer pricing enforcement, including the importance of robust documentation, strict comparability when applying the CUP method, and the need for value-chain and DEMPE analyses to assess whether intangible-related payments reflect genuine commercial benefits. The case also illustrated the importance of taxpayer cooperation in substantiating the arm’s length nature of related-party transactions.

For further details on the first webinar, including the case analysis and key takeaways, please check the article Challenging royalty payments in transfer pricing through the Andhra Paper case and the factsheet.