An Investigation into Transfer Pricing (TP) in Iranian Tax System

Since introducing globalization theories in recent years, international trade volume and as a result trade transactions volume especially between related parties have been increased. Multinational companies have tried to avoid paying tax by establishing extensive networks of related parties around the world through TP mechanism, so TP and its auditing in recent decays have become more important issues in tax systems of different countries. In this paper by using library studies, first of all, different aspects of TP have been explained and then tax related issues of TP examined in Iranian tax system. The results show that although TP regulations are not included in tax laws explicitly but in some cases by using the circulars of tax administration, the tax authorities can implement the Arm's Length Principle and then deter tax avoidance and tax evasion resulting from TP mechanism.