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Shifting-Profits through Tax Loopholes. Evidence from Ecuador

Chalendard, Cyril - 2016

Based on a natural experiment that took place in Ecuador in the context of a capital outflow tax, this paper presents suggestive evidence of the emergence of an abnormal transfer pricing behavior. We exploit the fact that some imports were eligible to a tax-credit measure aiming to offset the...

Persistent link: https://www.econbiz.de/10011584939

Transfer Pricing and the Arm's Length Principle under Imperfect Competition

Choi, Jay Pil; Furusawa, Taiji; Ishikawa, Jota - 2018

This paper analyzes incentives of a multinational enterprise to manipulate an internal transfer price to take advantage of corporate-tax differences across countries under both monopoly and oligopoly. We examine “cost plus” and “comparable uncontrollable price” as two alternative...

Persistent link: https://www.econbiz.de/10011932053

Unilateral Tax Reform: Border Adjusted Taxes, Cash Flow Taxes, and Transfer Pricing

Bond, Eric; Gresik, Thomas A. - 2018

We study the economic effects of unilateral adoption of corporate tax policies that include destination-based taxes and …/or cash ow taxes in a heterogeneous agent model in which multinational firms can endogenously shift income between countries … the adopting country can decrease both with the adoption of destination-based taxes and the adoption of cash ow taxes. For …

Persistent link: https://www.econbiz.de/10011932070

Strategic trade policy through the tax system

Becker, Johannes - 2010

If conventional instruments of strategic trade policy are unavailable, the system of foreign profit taxation and transfer price guidelines may serve as surrogate policy instruments. In this paper, I consider a model where firms from two countries compete with each other on a third market. I...

Persistent link: https://www.econbiz.de/10010270452

Playing Easy or Playing Hard to Get: When and How to Attract FDI

Gresik, Thomas A.; Schindler, Dirk; Schjelderup, Guttorm - 2020

ability to collect taxes, since the benefit of attracting more FDI outstrips the benefit of increased tax revenue. Countries … with very strong institutions benefit from FDI and should utilize their full ability to collect taxes. …

Persistent link: https://www.econbiz.de/10012269485

Profit Shifting and Equilibrium Principles of International Taxation

Francois, Manon - 2021

We study the choice between source-based and destination-based corporate taxes in a two-country model, allowing … show that destination-based taxes are a Nash equilibrium when firms generate low revenues, which implies the presence of …

Persistent link: https://www.econbiz.de/10012657917

A Negotiation-Based Model of Tax-Induced Transfer Pricing

Becker, Johannes; Davies, Ronald B. - 2014

We present a new model of tax induced transfer pricing as an alternative to the oft-used concealment model. Inspired by interviews with practitioners, we consider a large multinational firm which is audited by the tax authority in the high-tax location. When this country adjusts the transfer...

Persistent link: https://www.econbiz.de/10010398549

Rig Services and Taxation

Osmundsen, Petter - 2014

A long period of rig scarcity and high rates has led to innovation in the procurement of rig services and in relationships between oil companies and rig contractors. Discussions have been conducted on joint ventures between companies and contractors, for instance. This paper describes and...

Persistent link: https://www.econbiz.de/10010420715

Abusive Transfer Pricing and Economic Activity

Nielsen, Søren Bo; Schindler, Dirk; Schjelderup, Guttorm - 2014

We demonstrate that the choice of the transfer price and its effect on intra-firm trade and investment depends on the probability of detection and thus on the measure, on which tax authorities base their audit. A policy implication of the paper is that it should be preferable to condition audits...

Persistent link: https://www.econbiz.de/10010420744

The Economics of Advance Pricing Agreements

Becker, Johannes; Davies, Ronald B.; Jakobs, Gitte - 2014

Advance pricing agreements (APAs) determine transfer prices for intra-firm transactions in advance. This paper interprets these contracts as a means to overcome a hold-up problem that occurs because governments cannot commit to non-excessive future tax rates. In addition, with private...

Persistent link: https://www.econbiz.de/10010435749