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Revenue distribution in multinational firms through transfer pricing

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  • José G. Vargas-Hernández

    (Centro Universitario de Ciencias Económico Administrativas de la Universidad de Guadalajara. Periférico Norte N° 799, Núcleo Universitario Los Belenes, C.P. 45100, Zapopan, Jalisco, México.)

  • Deyanira Bernal Domínguez

    (Facultad de Contaduría y Administración de la Universidad Autónoma de Sinaloa. Ciudad Universitaria, Blvd. Universitarios y Avenida De las Américas, Culiacán, Sinaloa, México.)

  • Rubén Miranda López

    (Facultad de Contaduría y Administración de la Universidad Autónoma de Sinaloa. Ciudad Universitaria, Blvd. Universitarios y Avenida De las Américas, Culiacán, Sinaloa, México.)

Abstract

The objective of this paper is to analyze the procedures used by multinational enterprises to distribute the revenue generated by their subsidiaries abroad. Also, the paper intends to answer the question how multinational enterprises (mnes) allocate taxes paid on this income among the fiscal jurisdictions in which they operate. In this study, the analytic research method was applied, in the literature review, in order to determine how income-shifting works as a fiscal strategy applied by mnes. It is concluded that mnes use organizational strategies to take advantage of the comparative advantages from the different countries in which they operate, and, as a result, an intercompany trade takes place.

Suggested Citation

  • José G. Vargas-Hernández & Deyanira Bernal Domínguez & Rubén Miranda López, 2013. "Revenue distribution in multinational firms through transfer pricing," Economía, Instituto de Investigaciones Económicas y Sociales (IIES). Facultad de Ciencias Económicas y Sociales. Universidad de Los Andes. Mérida, Venezuela, vol. 38(36), pages 67-84, july-dece.
    • Handle: RePEc:ula:econom:v:38:y:2013:i:36:p:67-84
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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