Transfer Pricing Risk Awareness of Multinational Corporations - Evidence from a Global Survey
AbstractThis paper investigates the transfer pricing risk awareness of multinational firms using cross-sectional data of more than 350 firms located in 24 countries and classified in 12 industries. Moving beyond the sole tax optimization motives of multinational firms, we extend the existing literature by using unique firm-level information such as that the transfer pricing risk awareness is assessed and reported by the person ultimately responsible for transfer pricing. We find that the level of transfer pricing risk awareness of multinational companies predominantly depends on (i) the industry a firm operates in, (ii) a country's risk classification with respect to its transfer pricing regulations (e.g. penalty regimes in case of non-compliance with transfer pricing regulations), (iii) firm size and (iv) the interaction effect of the first two factors. By way of contrast, the time of introduction of transfer pricing regulations and also tax considerations do not seem to play a crucial role for transfer pricing risk perceptions.
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Bibliographic InfoPaper provided by Faculty of Economics and Statistics, University of Innsbruck in its series Working Papers with number 2009-21.
Date of creation: Sep 2009
Date of revision:
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More information through EDIRC
Transfer pricing; International taxation; Multinational firms; Tax risk management;
Other versions of this item:
- Jost, Sven P., 2009. "Transfer Pricing Risk Awareness of Multinational Corporations: Evidence from a Global Survey," Working Papers in Economics and Finance 2009-6, University of Salzburg, revised 07 Dec 2009.
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
This paper has been announced in the following NEP Reports:
- NEP-ACC-2009-10-17 (Accounting & Auditing)
- NEP-ALL-2009-10-17 (All new papers)
- NEP-RMG-2009-10-17 (Risk Management)
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