Transfer pricing definition12/6/2023 Do government regulations prevent transfer pricing manipulations? International Business & Economics Research Journal, 4(10), 1–9.Ĭhan, K., & Chow, L. Tightening of the German transfer pricing documentation requirements. ![]() Estimating the magnitude of capital flight due to abnormal pricing in international trade: The Russia–USA case. FIN 48, uncertainty and transfer pricing: (Im)Perfect together? Journal of International Accounting, Auditing and Taxation, 21(1), 32–51.īoyrie, M. American Economic Journal: Economic Policy, 6(2), 1–18.īorkowski, S. The differential effects of bilateral tax treaties. Fairness in international trade and investment: North American perspectives. Sorting into outsourcing: Are profits taxed at a gorilla’s arm’s length? Journal of International Economics, 90(2), 326–336.īird, F., Vance, T., & Woolstencroft, P. Why pay more? Corporate tax avoidance through transfer pricing in OECD countries. The Canadian Journal of Economics, 43(1), 232–253.īartelsman, E. multinationals’ behaviour: An integrated approach. International corporate taxation and U.S. Researches presented in relation to the transfer pricing manipulation are divided on three pillars: definition of the transfer pricing manipulation concept identification of the transfer pricing manipulation phenomenon impact at global level identification of ways to prevent this phenomenon.Īzémar, C. ![]() ![]() There are identified researches where the transfer pricing regulations are compared at the level of various countries in order to evaluate the strictness of the regulations from those countries. In this respect, there are presented previous studies on transfer pricing regulations, but also studies related to the transfer pricing manipulation phenomenon. To address these concerns, tax authorities around the world have been increasing their scrutiny of transfer pricing practices, and have been developing regulations and guidelines to ensure that multinational corporations are not engaging in tax avoidance or other harmful practices.This chapter provides a short presentation regarding the history of the “transfer pricing” concept, starting from the moment that triggered the shaping of the transfer pricing notion and continuing with the appearance of the first transfer pricing regulations, including also a short presentation regarding the involvement of the Organization for Economic Co-operation and Development (“OECD”) in the transfer pricing field. Furthermore, based on the literature reviewed, the chapter includes some concerns in relation to the transfer pricing concept. This can have negative implications for the overall efficiency and competitiveness of the global economy. ![]() This has led to concerns among tax authorities that they may be losing out on significant tax revenues, and among the public that multinational corporations are not paying their fair share of taxes.įurthermore, transfer pricing can also be used to distort trade patterns and investment decisions, as companies may be incentivized to locate their operations in countries with lower tax rates rather than where it makes the most economic sense. Transfer pricing has become a hot economic issue because it can be used by multinational corporations to shift profits to lower-tax jurisdictions, thereby reducing their overall tax liabilities. The objective of transfer pricing is to allocate the profits earned by the multinational corporation among its different subsidiaries, based on the value they contribute to the overall business. Transfer pricing refers to the practice of determining the price at which goods or services are bought and sold between related companies, such as subsidiaries of the same multinational corporation operating in different countries. What is Transfer Pricing and why is it a hot economic issue?
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