Negotiated Transfer Prices

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Title: Negotiated Transfer Prices
Authors: Becker, Johannes
Davies, Ronald B.
Permanent link: http://hdl.handle.net/10197/7188
Date: Nov-2015
Abstract: The predominant model of tax induced transfer pricing is based on the assumption that profit shifting is due to insufficient enforcement. However, evidence shows that the firms responsible for most profit shifting are also among the most frequently audited. We present an alternative model based on negotiations that avoid costly, yet uncertain, formal proceedings (e.g. court procedures). This model predicts that profit shifting increases in the tax gap even though enforcement is perfect. Further, it suggests that current efforts to streamline international tax law may have the unintended effect of increasing profit shifting.
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Start page: 1
End page: 7
Series/Report no.: UCD Centre for Economic Research Working Paper Series; WP2015/27
Keywords: Nash bargainingTransfer pricingTax avoidanceCorporate taxation
Language: en
Status of Item: Not peer reviewed
metadata.dc.date.available: 2015-11-06T14:54:01Z
Appears in Collections:Economics Working Papers & Policy Papers

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