Almost 200 multinationals get Inland Revenue visit

The Ministry of Finance set up a cell specialised in so-called “transfer pricing” within multinationals. Transfer pricing is the setting of the price for goods and services sold between controlled (or related) legal entities within an enterprise.

For example, if a subsidiary company sells goods to a parent company, the cost of those goods is the transfer price. Legal entities considered under the control of a single corporation include branches and companies that are wholly or majority owned ultimately by the parent corporation.

Certain jurisdictions consider entities to be under common control if they share family members on their boards of directors. It can be used as a profit allocation method to attribute a multinational corporation's net profit (or loss) before tax to countries where it does business.

The Finance Ministry spokeswoman Florence Angelici told the paper that "Checks are currently being carried at 194 companies”.
The companies were selected on the basis of so-called “data mining” whereby a risk analysis was carried out on various companies.

Particular attention was paid to big fluctuations in profit margins and payments to recipients in tax havens. Companies where either or both of these phenomena were found to be present are more likely to get a visit from the Inland Revenue.