Many developing countries have difficulties in mobilising their domestic tax resources. Significant informal sectors pay no taxes at all, and tax administrations struggle to tax the few multinational enterprises (MNEs) represented in their countries. Usually, more than 15 % of tax to GDP is considered necessary for sustainable development, a threshold still not met by a significant number of countries. International organisations, backed by the largest economies of the world, support low-income countries in their endeavor to increase tax revenues and mobilise their tax resources. This assistance aims to make the aid recipients independent from direct monetary payments, to support the establishment of stable states, and to fight poverty. For the last decades, transfer pricing (TP) has been considered an important pillar in revenue generation and for making MNEs pay their fair share of taxes in developing countries.
