QUESTION ONE The transfer pricing is the process for setting price of a transaction between two entities that are part of the same group of companies. The difficulty in monitoring and taxing such transactions is that they do not take place on an open market. Whereas a commercial transaction between two independent companies (uncontrolled transaction") on competitive market should reflect the best option for both companies, transactions between affiliated companies (controlled transactions) are more likely to be made in the best interest of the global corporation. It can be in the interest of the global corporation to make higher profits in lower-taxed jurisdictions and lower profits in higher-taxed ones, as a means of reducing its overall tax bill. Required: Using Income tax Act 2004 and Tax Administration (Transfer pricing) Regulations, 2018 substantiate whether transfer mispricing is tax avoidance or tax evasion. (05 Marks)