Ngeyane, Zanele Bitris2021-08-082021-08-082020https://hdl.handle.net/10539/31488A research report submitted to the Faculty of Commerce, Law and Management, University of the Witwatersrand, Johannesburg, in partial fulfilment of the requirement of Master of Commerce (Specialising in Taxation), 2020Over the years, tax administrators have collected declining tax revenues in part due to transfer pricing complexities. Complexities in transfer pricing legislation and the loopholes thereby created resulted in several tax disputes, some of which led to court cases.1 Taxpayers in South Africa and world-wide have exploited the complexities in transfer pricing, hiding profits in associated enterprises with lower tax rates in order to minimise group tax and maximise group profits. It has been relatively simple to exploit transfer pricing legislation in South Africa due to the narrow scope of the definition of connected persons and the minimal disclosure requirements, as well as the lack of transfer pricing specific penalties. Taxpayers had low costs associated with transfer pricing compliance. With the changes in legislation implemented in order to absorb the OECD mandatory disclosure rules, the definition of connected persons was replaced with the associated enterprises definition and transfer pricing penalties were introduced. Tax revenue is likely to increase and companies are likely to incur higher costs in complying with the new rules and minimising taxenThesis