Multinational Enterprises

Transfer pricing rules apply primarily to the cross-border business operations of multinational enterprises (“MNEs”). MNEs are firms that conduct integrated business operations in more than one country. This chapter describes the factors that gave rise to MNEs in an attempt to provide the reader with the basic business context for the detailed transfer pricing discussion that will follow in the rest of this Manual. This chapter shows how an MNE may be able to exploit integration opportunities in the cross-border production of goods and provision of services through a “value-chain” (or “value-added chain”). As used in this Manual, the term “value chain” refers to the process or activities by which a company adds value to a good or service, including production, marketing, and the provision of after-sales service.

Sustainable Development Goals:

Decent Work and Economic Growth