The impact of transfer pricing on tax avoidance with foreign ownership as a moderating variable: Evidence from Vietnam

Giang Thi Cam Nguyen () and Duy Thanh Nguyen ()

Asian Journal of Economic Modelling, 2025, vol. 13, issue 3, 437-450

Abstract: With the rise of globalization and the proliferation of multinational enterprises, transfer pricing practices have become increasingly complex and contentious. This issue has become particularly significant in the context of developing economies, including Vietnam, where special incentives with flexible mechanisms are considered key to creating an attractive investment climate for foreign investors. Arising from this, the study investigated the relationship between transfer pricing and tax avoidance in Vietnam from 2020 to 2023. The study sampled 217 industrial companies listed on the Hanoi Stock Exchange and the Ho Chi Minh Stock Exchange and extracted data from the annual reports of these companies. Data were analyzed using descriptive statistics as well as quantitative models. The results revealed that foreign ownership magnifies the relationship between transfer pricing and tax avoidance, suggesting that foreign-owned companies may engage more aggressively in transfer pricing activities to minimize their tax liabilities. Regarding the control variables, company size, company growth, and asset tangibility were positively associated with tax avoidance activities. Lastly, a contribution of this study is the pressing need for policymakers to enhance regulatory oversight and enforcement measures to address transfer pricing abuses.

Keywords: Foreign ownership; Industrial companies; Tax avoidance; Transfer pricing Vietnam. (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://archive.aessweb.com/index.php/5009/article/view/5578/8416 (application/pdf)

Related works:
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:asi:ajemod:v:13:y:2025:i:3:p:437-450:id:5578

Access Statistics for this article

More articles in Asian Journal of Economic Modelling from Asian Economic and Social Society
Bibliographic data for series maintained by Robert Allen ().