Formula Apportionment and Transfer Pricing under Oligopolistic Competition
This paper demonstrates that under conditions of imperfect (oligopolistic) competition, a transition from separate accounting (SA) to formula apportionment (FA) does not eliminate the problem of profit shifting via transfer pricing. In particular, if affiliates of a multinational firm face oligopolistic competition, it is beneficial for the multinational to manipulate transfer prices for tax-saving as well as strategic reasons under both FA and SA. The analysis shows that a switch from SA rules to FA rules may actually strengthen profit shifting activities by multinationals.
Year of publication: |
2001
|
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Authors: | Nielsen, Søren Bo ; Raimondos-Møller, Pascalis ; Schjelderup, Guttorm |
Publisher: |
Munich : Center for Economic Studies and ifo Institute (CESifo) |
Saved in:
freely available
Series: | CESifo Working Paper ; 491 |
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Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Working Paper |
Language: | English |
Other identifiers: | 84261379X [GVK] hdl:10419/75854 [Handle] RePec:ces:ceswps:_491 [RePEc] |
Source: |
Persistent link: https://www.econbiz.de/10010315216
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