Transfer pricing policy and the intensity of tax rate competition

Johannes Becker and Clemens Fuest

Economics Letters, 2012, vol. 117, issue 1, 146-148

Abstract: This note provides a novel argument why countries may have incentives to allow for some profit shifting to low-tax jurisdictions. The reason is that a tightening of transfer pricing policies by high-tax countries may lead to more aggressive tax rate competition by low-tax countries.

Keywords: Corporate taxation; Profit shifting; Tax competition (search for similar items in EconPapers)
JEL-codes: F23 H25 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (31)

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Related works:
Working Paper: Transfer Pricing Policy and the Intensity of Tax Rate Competition (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:117:y:2012:i:1:p:146-148

DOI: 10.1016/j.econlet.2012.04.061

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