The Resource Auditing internal transfer prices in multinationals under monopolistic competition

Auditing internal transfer prices in multinationals under monopolistic competition

Label
Auditing internal transfer prices in multinationals under monopolistic competition
Title
Auditing internal transfer prices in multinationals under monopolistic competition
Creator
Subject
Language
eng
Summary
This paper derives an appropriate standard price that can be used by the tax authorities of a country for auditing transfer prices in multinationalfirms (MNFs) for the purpose of social welfare maximization of the country. It is assumed that the corporate tax rate in the host country, where MNFs undertake foreign direct investment to locate their manufacturing divisions, is lower than that in the home country. The conclusion is that the tax authorities of the home country should not always force MNFs to hold down the transfer price through a too strict audit standard if it aims to maximize social welfare of the country in the long-run equilibrium. This result implies that tax authorities face a trade-off between consumer welfare and tax revenue when determining the standard price used for auditing. One notable implication is that the tax authorities should raise the upper-limit price allowed for internal transfers as the elasticity of substitution between brands for consumers decreases
Citation source
In: International tax and public finance. - Norwell. - Vol. 19 (2012), no. 6 ; p. 800-818
http://library.link/vocab/creatorName
Matsui, K
Geographic coverage
International
Language note
English
http://library.link/vocab/subjectName
  • transfer pricing
  • MNE
Label
Auditing internal transfer prices in multinationals under monopolistic competition
Instantiates
Publication
Label
Auditing internal transfer prices in multinationals under monopolistic competition
Publication

Library Locations

    • IBFD Library AmsterdamBorrow it
      Rietlandpark 301, Amsterdam, 1019 DW, NL
      52.37366609999999 4.9336932
Processing Feedback ...