International transfer pricing and tax avoidance: evidence from linked trade-tax statistics in the UK

Liu, L, Schmidt-Eisenlohr, Tim and Guo, Dongxian (2017) International transfer pricing and tax avoidance: evidence from linked trade-tax statistics in the UK. Oxford University Centre for Business Taxation, Oxford UK.

[img]
Preview
PDF
Download (3MB) | Preview

Abstract

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.

Item Type: Other Working Paper
Keywords: transfer pricing, corporate taxation avoidance, multinational firms
Subject(s): Taxation
Centre: Oxford University Centre for Business Taxation > CBT Working Papers
Date Deposited: 04 May 2018 13:35
Last Modified: 04 May 2018 13:35
Funders: ESRC
URI: http://eureka.sbs.ox.ac.uk/id/eprint/6815

View statistics

Actions (login required)

Edit View Edit View