The Effect of Tax-Motivated Transfer Pricing on U.S. Aggregate Trade Statistics: Working Paper 2019-05

Dorian Carloni, Daniel Fried and Molly Saunders-Scott

No 55284, Working Papers from Congressional Budget Office

Abstract: The prices that multinational corporations set for transactions among international affiliates—referred to as transfer prices—play an important role in determining where income is taxed. Many factors affect how multinationals set their transfer prices, including tax considerations. If tax considerations affect transfer prices, then those changes in transfer prices may distort aggregate trade and income statistics. In this paper, we analyze how corporate income tax rates affect trade flows between the affiliates of multinationals—known as related-party trade—to examine

JEL-codes: F23 H25 H26 (search for similar items in EconPapers)
Date: 2019-05-31
New Economics Papers: this item is included in nep-int, nep-pbe and nep-pub
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