This study examines how a strategic tax auditor affects a multinational firm's transfer pricing in an incomplete information tax compliance game. Our model uses a divisionalized firm, in both a low-tax and a high-tax country, that decides to implement a transfer-pricing regime with either one or...

Large multinational companies are regularly suspected of using transfer pricing of intangibles to shift profits from high- to low-tax jurisdictions. We study the optimal transfer prices while endogenizing the location choice of intangibles and considering spillovers. In line with the initial...

The Internet Appendix includes formal claims and proofs for the alternative sequence section. The original paper `When do firms use one set of books in an international tax compliance game?' is available at the following URL: https://ssrn.com/abstract=3012231