The Effect of Tax-Motivated Transfer Pricing on U.S. Aggregate Trade Statistics: Working Paper 2019-05
Daniel Fried and
No 55284, Working Papers from Congressional Budget Office
The prices that multinational corporations set for transactions among international affiliatesâ€”referred to as transfer pricesâ€”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 multinationalsâ€”known as related-party tradeâ€”to examine
JEL-codes: F23 H25 H26 (search for similar items in EconPapers)
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