This paper proposes a model of optimal tax-induced transfer pricing with a fuzzy arm's length parameter. Fuzzy numbers provide a suitable structure for modelling the ambiguity that is intrinsic to the arm's length parameter. For the usual conditions regarding the anti-shifting mechanisms, the...

Using a survey of tax executives from multinational corporations, we document that some firms set their transfer pricing strategy to minimize tax payments, but more firms focus on tax compliance. We estimate that a firm focusing on minimizing taxes has a GAAP effective tax rate that is 6.6...

Transfer pricing taxation is a significant source of tension between Multinational Firms (MNFs) and tax authorities. The tension relates to the different perspectives of MNFs and tax authorities. MNFs view taxes related to transfer prices as costs to avoid. On the other hand, regulators and tax...

Advance pricing agreements are long-term contracts between multinational taxpayers and tax authority(ies), according to which the taxpayer consents to use the agreed upon transfer price for its related transactions for a fixed period of time. We argue that for such an agreement to be based on...

Transfer Pricing policies are the focus of many investigations on corporate income around the world, yet corporations rarely use models and metrics to estimate their exposure to tax risk. In this paper I propose a framework for multinational enterprises to deal with transfer pricing risk, i.e....

The Lenzini Steel case extends the classic cost/managerial accounting treatment of transfer pricing to include a wider range of inter-company transactions (ICTs): (1) product sales (traditional setting), (2) royalty payments for intellectual property, (3) machine acquisition and management fees,...

Well before the OECD's BEPS Project began, there has been an ongoing debate over whether the Arm's Length Principle (ALP) provides an adequate basis for determining the allocation of income between associated enterprises in cross-border controlled transactions, and whether the principle should...