Transfer Pricing Regulation and Taxation of Royalty Payments

Steffen Juranek, Dirk Schindler and Guttorm Schjelderup

VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking from Verein für Socialpolitik / German Economic Association

Abstract: We analyze the implications of OECD methods to regulate transfer pricing and the role of a royalty tax for abusive transfer pricing. We show: (i) Under traditional methods, mispricing of royalty payments does not affect investment, but the Transactional Profit Split Method triggers higher investment to facilitate profit shifting. (ii) Royalty taxation reduces both profit shifting and investment. (iii) A royalty tax rate below the corporate tax rate leads to overinvestment in an ACE tax system.

JEL-codes: F23 H25 H32 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-acc, nep-pbe and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/168118/1/VfS-2017-pid-2428.pdf (application/pdf)

Related works:
Journal Article: Transfer pricing regulation and taxation of royalty payments (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc17:168118

Access Statistics for this paper

More papers in VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking from Verein für Socialpolitik / German Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().