Strathmore Tax Research Centre Hosts First Transfer Pricing Colloquium

On the 20th and 21st of May 2021, the Strathmore University Law School (SLS) in conjunction with the Strathmore Tax Research Centre (STRC) hosted its first Transfer Pricing Colloquium. Transfer Pricing is a process by which two related entities set a price at which goods, services and intangible assets are exchanged between the related entities.  This price-setting process is of particular interest to both the local revenue authorities and the related companies themselves.

From the revenue authorities’ perspective and to an extension the state, the conversation on transfer pricing is important because the transfer pricing can be used as a method of shifting profits from one jurisdiction to another. This in turn means that transfer pricing can be used as a method of tax evasion. For example, let us assume that we have Company A and Company B both of which are ultimately owned by Company C.  Company A, incorporated in Kenya, makes a profit of say 30, 000 US Dollars and buys input goods from Company B incorporated in Mauritius for say 20,000 US Dollars. Seeing that both companies are owned by C, Company C has an incentive of asking company B to sell the input goods at say 40, 000 US dollars which would ultimately reduce the profits the Kenyan company makes.

Based on the above example, the state has an interest in making sure that transfer pricing is regulated. This is because if left unregulated, companies would evade taxes thus denying the countries where production has happened their dues taxes. With the shifting of taxes, countries (especially developing) would be forced into a global race to the bottom in a bid to come up with friendly tax laws.

From the company’s perspective, there an interest in having proper transfer pricing because nothing in the law stops companies from dealing with related companies. At times, it is even necessary for a company to deal either with its subsidiaries or other related entities. This is very prevalent with multinational companies for example Google, Apple Inc., General Electric and the like, who have to deal with their subsidiaries and associated companies incorporated in various parts of the world. For such companies, transfer pricing is important because if done incorrectly, then they face the risk of hefty penalties imposed by the local authorities and the overall risk of double taxation.

Based on the above, SLS in conjunction with STRC, organised the First Transfer Pricing colloquium. The colloquium targeted tax practitioners and any other tax enthusiasts. The colloquium focused on giving the attendants a deep understanding of the regulatory framework and transfer pricing methods and tools.

This colloquium is only the first one; other colloquiums on transfer pricing will be organised by the STRC. STRC endeavours to keep you informed on any tax issues arising. If you wish to contact us please reach us by writing to or

This article was written by John Kiragu, Graduate Assistant, Strathmore Law School.  

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