Intertax
Volume 42, Issue 6/7 (2014) pp. 352 – 404

https://doi.org/10.54648/taxi2014038

Abstract

Intercompany transactions generally offer the opportunity to shift income from one jurisdiction to the other, which maybe a valuable instrument for multinationals to reduce the overall tax burden. At the same time, profit shifting imposes risk to governments as it may reduce tax revenues. More and more governments are, therefore, introducing and extending transfer pricing regulations in order to combat profit shifting through intercompany transactions. This study examines forty-four countries and analyses the development of different aspects of transfer pricing regulations over a time period of nine years (2001-2009). In order to show the differences of the regulations in a single measure, an attempt is made to categorize transfer pricing regulations regarding their stringency and impact. The results of the categorization confirm not only the increasing importance of transfer pricing regulations, but also offer very useful and valuable information for future research.

Extract

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