International Transfer Pricing and Tax Avoidance: Evidence from Linked Trade-Tax Statistics in the UK
Tim Schmidt-Eisenlohr () and
No 6594, CESifo Working Paper Series from CESifo Group Munich
This paper employs unique data on export transactions and corporate tax returns of UK multinational firms and finds that firms manipulate their transfer prices to shift profits to lower-taxed destinations. It uncovers three new findings on tax-motivated transfer mispricing in real goods. First, transfer mispricing increases substantially when taxation of foreign profits changes from a worldwide to a territorial approach in the UK, with multinationals shifting more profits into low-tax jurisdictions. Second, transfer mispricing increases with a firm’s R&D intensity. Third, tax-motivated transfer mispricing is concentrated in countries that are not tax havens and have low-to-medium-level corporate tax rates.
Keywords: transfer pricing; corporate taxation avoidance; multinational firms (search for similar items in EconPapers)
JEL-codes: F23 H25 H32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-acc, nep-eur, nep-int and nep-pbe
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Working Paper: International Transfer Pricing and Tax Avoidance: Evidence from Linked Trade-Tax Statistics in the UK (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_6594
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