As the number of multinational enterprises increases, the number of transactions between entities be-longing to the same multinational group rises as well. Intercompany transactions generally offer the opportunity to shift income from one jurisdiction to the other. Income shifting can be driven by tax aspects, for instance a tax rate differential, or by firm-specific tax attributes like tax losses. 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. In addition, the OECD has made a great effort in providing guidelines on the design of transfer pricing regulations which are, by now, widely accepted in member and non-member countries. This study examines transfer pricing regulations in 44 countries based on an extensive data collection and analyses the development of different aspects of such regulations over a time period of nine years (2001-2009). The considered aspects comprise the existence and applicability of transfer pricing regu-lations, i.e. whether transfer pricing regulations have been introduced in the given country and, if so, to which transactions they apply, the available methods for the determination of transfer prices as well as implemented documentation requirements including submission deadlines. Furthermore, transfer pricing penalties, the statute of limitations, and advance pricing agreements are studied. The survey shows considerable differences between countries regarding those aspects depending not only on their geographical location but also on their position as a high- or low-tax country. Moreover, the analysis of the development of transfer pricing regulations over time reveals that, within the past decade, a considerable number of countries have introduced or tightened transfer pricing regulations, while not a single country has loosened or abolished them. In order to show the differences of the regulations in a single measure, an attempt is made to catego-rize transfer pricing regulations with respect to their stringency and impact. The new measure extends existing variables by following a well comprehensible approach, but more importantly by referring to a more comprehensive data collection. The results of the categorization confirm not only the increas-ing importance of transfer pricing regulations, but also offer very useful and valuable information for future research on the influence of transfer pricing regulations on corporate decisions.
