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Tariff-induced transfer pricing and the CCCTB

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  • Ronald B. Davies

Abstract

The common consolidated corporate tax base has been suggested as a way to curb tax avoidance by allocating profits across borders via a formula. This paper demonstrates that when transfer pricing occurs both for tariff and tax minimization, that moving from separate accounting to formula apportionment can actually increase transfer pricing. This, combined with arm's length pricing regulations, can result in lower revenues for high-tax countries and lower overall revenues. This casts additional doubt over whether such a move would have its intended, revenue-enhancing effects.

Suggested Citation

  • Ronald B. Davies, 2013. "Tariff-induced transfer pricing and the CCCTB," Working Papers 201314, School of Economics, University College Dublin.
    • Handle: RePEc:ucn:wpaper:201314
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    File URL: http://hdl.handle.net/10197/4799
    File Function: First version, 2013
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    References listed on IDEAS

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