Tax Exceptions and its Relationship with Transfer Pricing in the Iranian Taxation System

Nowadays globalization has expanded activities of multinational companies in various countries. Therefore, transfer pricing has become currently such a significant issue faced by governments and tax authorities all over the world. Statistics indicate that governments are missing some of their revenue due to the unfair transfer pricing. In order to keep away from tax avoidance and tax evasion, more than 40 countries have legislated specific transfer pricing regulations to prevent tax crimes. In recent years, the Iranian tax authorities have been interested in this subject but there is still no regulations and directives for companies on transfer pricing rules. The current paper aims at studying the role of transfer pricing methods by using sectional and geographical exceptions to avoid tax in Iran. We have recognized and extracted those legal cases which are linked to this topic. Accordingly, lack of any regulations in this area means that companies are capable of abusing some points to decrease their profits as well as their tax debts. Underlying study in this paper proposes some tips as initial points to prepare a draft pertaining mentioned subject in the Iranian taxation system.