Simplification in Transfer Pricing

2021 ◽  
Vol 22 (3) ◽  
Author(s):  
Aitor Navarro
Keyword(s):  
Developing Countries ◽  
International Organizations ◽  
Transfer Pricing ◽  
Policy Option ◽  
Profit Shifting ◽  
Accepted Standard

It is the aim of this contribution to sustain that, despite the inherent complexity that the enforcement of the arm’s length rationale entails, it is feasible—and desirable—to introduce simplification measures without abandoning this worldwide accepted standard, especially in the context of developing countries and despite reticence shown by international organizations such as the OECD. Complexity in transfer pricing erodes fairness and equity and promotes profit shifting, which paradoxically constitutes the opposite outcome that this set of rules wants to achieve. This is the reason why it is urgent to propose and encourage the adoption of a means to neutralize unnecessary complexity in this field. The adoption of rebuttable predetermined margins and/or methods is proposed as the best solution in a context in which policymakers want to keep the arm’s length rationale intact. Also, even despite its shortcomings, irrebuttable predetermined safe harbors should be considered potentially feasible and a valid policy option.

scholarly journals THE CONTEMPORARY INTERNATIONAL TAX SYSTEM, DEVELOPING COUNTRIES, BEPS AND OTHER CURRENT ISSUES / O SISTEMA TRIBUTÁRIO INTERNACIONAL CONTEMPORÂNEO, PAÍSES EM DESENVOLVIMENTO, BEPS E OUTRAS QUESTÕES ATUAIS

2018 ◽  
Vol 6 (7) ◽  
Author(s):  
Marcos Aurelio Pereira Valadão
Keyword(s):  
Developing Countries ◽  
International Organizations ◽  
The South ◽  
Profit Shifting ◽  
Tax System ◽  
Tax Systems ◽  
International Tax ◽  
Rich Countries

This paper analyzes the Contemporary International Tax System with focus on international tax cooperation, the participants of this context, that goes beyond the countries, and the issues that are present in base erosion and profit shifting (BEPS) Project with the focus on  those that are the most important for developing countries, also taking into consideration the Brazilian approach to those issues. It also verifies the role of international organizations (including NGOs), The paper consider other aspects, for example, the south Centre initiative on tax cooperation, and the biased approach from the northern rich countries towards the south poorer economies, coming to the conclusion that the differences between the needs of of developed and developing countries, which affect their tax systems, and the different tax systems itself, must be taken into account.

scholarly journals Transfer Pricing Audit Challenges and Dispute Resolution Effectiveness in Developing Countries with Specific Focus on Zimbabwe

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Favourate Yelesedzani Sebele-Mpofu ◽  
Eukeria Mashiri ◽  
Patrick Korera
Keyword(s):  
Developing Countries ◽  
Multinational Enterprises ◽  
Resource Constraints ◽  
Transfer Pricing ◽  
Specific Reference ◽  
Profit Shifting ◽  
Business World ◽  
Factors Affecting ◽  
The Core ◽  
Arm’S Length Principle

Abstract Base erosion and profit shifting activities of multinational enterprises (MNEs) have been a hot issue globally. Topical among the strategies employed by MNEs has been the issue of transfer pricing (TP). Developing countries are argued to be significantly affected by TP manipulation resulting in substantial tax revenues being lost. As a response to curb the unfavourable impacts of transfer mispricing, most developing countries have adopted the OECD TP guidelines and enacted TP legislation to regulate TP activities. The arm’s length principle is the core of TP legislation, yet it has brought challenges for tax administrators and their auditors in enforcing and assessing compliance respectively leading to disputes. In view of the ever-changing business world and continuous efforts by MNEs to minimise their tax obligations through income shifting, it was imperative to assess the factors affecting the effectiveness of TP audits and dispute resolutions as measures to enhance compliance and enforcement in developing countries, with specific reference to Zimbabwe. Findings include the lack of clarity in TP legislation, resource constraints and complexity of transactions, lack of expertise as well as the shortage of comparable data. Developing countries are encouraged to formulate clear TP regulations and invest in the capacitation of revenue authorities.

scholarly journals Substitution across profit shifting methods and the impact on thin capitalization rules

2021 ◽  
Author(s):  
Gideon Goerdt ◽  
Wolfgang Eggert
Keyword(s):  
Multinational Firms ◽  
Transfer Pricing ◽  
Multinational Firm ◽  
Profit Shifting ◽  
Goods And Services ◽  
Internal Goods ◽  
Transfer Prices ◽  
Debt Shifting ◽  
The Impact ◽  
Thin Capitalization

AbstractThin capitalization rules limit firms’ ability to deduct internal interest payments from taxable income, thereby restricting debt shifting activities of multinational firms. Since multinational firms can limit their tax liability in several ways, regulation of debt shifting may have an impact on other profit shifting methods. We therefore provide a model in which a multinational firm can shift profits out of a host country by issuing internal debt from an entity located in a tax haven and by manipulating transfer prices on internal goods and services. The focus of this paper is the analysis of regulatory incentives, $$(i)$$ ( i ) if a multinational firm treats debt shifting and transfer pricing as substitutes or $$(ii)$$ ( i i ) if the methods are not directly connected. The results provide a new aspect for why hybrid thin capitalization rules are used. Our discussion in this paper explains why hybrid rules can result in improvements in welfare if multinational firms treat methods of profit shifting as substitutes.

scholarly journals Problems of the preliminary customs informing system and the introduction of the Single Window at the sea check points of the Russian Federation

2018 ◽  
Vol 239 ◽  
pp. 04004 ◽  
Author(s):  
Svetlana Maydanova ◽  
Igor Ilin
Keyword(s):  
Developing Countries ◽  
International Trade ◽  
Russian Federation ◽  
International Organizations ◽  
International Standards ◽  
Eurasian Economic Union ◽  
Check Points ◽  
The Russian Federation ◽  
Economic Union ◽  
National Governments

The Single Window concept in the international trade and logistics has been explored by international organizations and national governments over the last two decades. International standards and recommendations, government decisions on this approach are widespread today in both developed and developing countries. Similar decisions and legal acts were implemented during the last ten years by the Russian Federation, as a member of the Eurasian Economic Union. This article provides overview of the following coherent stage – the implementation of preliminary customs informing system at sea check points of the RF with concerns of the Single Window introduction.

The Provision of Surgical Care by International Organizations in Developing Countries: A Preliminary Report

2009 ◽  
Vol 34 (3) ◽  
pp. 397-402 ◽  
Author(s):  
K. A. Kelly McQueen ◽  
Joseph A. Hyder ◽  
Breena R. Taira ◽  
Nadine Semer ◽  
Frederick M. Burkle ◽  
...  
Keyword(s):  
Developing Countries ◽  
International Organizations ◽  
Preliminary Report ◽  
Surgical Care

scholarly journals Controlling Light Pollution in Chile: A Status Report

2001 ◽  
Vol 196 ◽  
pp. 39-48 ◽  
Author(s):  
Malcolm G. Smith
Keyword(s):  
Developing Countries ◽  
International Organizations ◽  
Radio Astronomy ◽  
Status Report ◽  
Light Pollution ◽  
Critical Importance ◽  
The World ◽  
Control Light ◽  
Basic Level

A basic-level summary is provided of work since late 1993 to control light pollution in Chile. The purpose of this article is to stimulate such work inside Chile and to promote good lighting in developing countries in general. Chile is selected as the case study because of its critical importance to optical and radio astronomy, and the related economic and cultural benefits for Chile and the world. Examples are presented in some detail in order to illustrate adjustments that have been made to accommodate local scientific, cultural and economic realities and to show that it is necessary to anticipate the issues involved in controlling light pollution several decades before it would otherwise become a problem. It is hoped that international organizations such as the IAU, the IDA and the CIE can soon promote programmes in Chile that can serve as pilot programmes for other parts of the developing world.

Strategic Experts and Improvising Regulators: Explaining the IASC's Rise to Global Influence, 1973–2001

2005 ◽  
Vol 7 (3) ◽  
pp. 1-26 ◽  
Author(s):  
Leonardo Martinez-Diaz
Keyword(s):  
Developing Countries ◽  
International Organizations ◽  
Accounting Standards ◽  
Core Values ◽  
Securities And Exchange Commission ◽  
International Accounting Standards ◽  
Technical Expertise ◽  
Accounting Standard ◽  
The Us ◽  
Global Influence

This article traces the ascent of the International Accounting Standards Committee (IASC) from an obscure group with little influence in the early 1970s to a pre-eminent position as global accounting standard-setter in 2001. I argue that the rise of the IASC can be explained by several factors, including the IASC's ability to build legitimacy through technical expertise, to embed itself in a network of international organizations, and to benefit from rivalries among developed and developing countries and among European and American regulators. But the most important reason for the IASC's success is that its core values aligned strongly with the interests of the most powerful regulator-the US Securities and Exchange Commission.

Base Erosion, Profit Shifting and Developing Countries

2016 ◽  
Vol 72 (3) ◽  
pp. 268 ◽  
Author(s):  
Ernesto Crivelli ◽  
Michael Keen ◽  
Ruud de Mooij
Keyword(s):  
Developing Countries ◽  
Profit Shifting

Transfer Pricing and Location of Intangibles - Spillover and Tax Avoidance through Profit Shifting

2020 ◽  
Author(s):  
Rebecca Reineke ◽  
Katrin Weiskirchner-Merten
Keyword(s):  
Empirical Evidence ◽  
Transfer Pricing ◽  
Home Bias ◽  
Tax Avoidance ◽  
Optimal Location ◽  
The Other ◽  
Profit Shifting ◽  
Tax Rate ◽  
Length Range ◽  
A Company

This study examines how spillovers affect a multinational company's choice of an intangible's location and the corresponding transfer price for using this intangible. Our model uses a company with a domestic division in a high-tax country and a foreign division in a low-tax country, where each division's activities generate spillovers on the other division's income. In contrast to previous studies, our analysis incorporates an intangible's optimal location when the company trades off tax minimization and efficient activities. By locating the intangible abroad, the company reduces its tax liability, whereas locating the intangible domestically yields more efficient domestic division activities. For a high spillover of the domestic division, the company locates the intangible domestically. Our model supports empirical evidence regarding intangibles' location that is interpreted as "home bias". Additionally, we show how variations in regulatory parameters-arm's length range and tax rate differential-affect the divisions' activities and the intangible's location.

Sign in / Sign up

Export Citation Format

Share Document