Relationship-Specific Investments and the Transfer Pricing Paradox |
| |
Authors: | Sansing Richard |
| |
Institution: | (1) Tuck School of Business at Dartmouth, 100 Tuck Hall, Hanover, NH, 03755 |
| |
Abstract: | The revised Treasury Regulations interpreting Internal Revenue Code Section 482 allow the use of profit-based transfer pricing methods, as well as the older methods based on prices from comparable transactions between independent parties. This paper compares the effects of price-based and profit-based transfer pricing methods on the allocation of taxable income in a model in which organization structure affects the level of relationship-specific investments made by vertically integrated groups and comparable independent firms. Analysis of the model shows that the price-based methods systematically allocates more taxable income to foreign subsidiaries and less to domestic parents than does the profit-based method. |
| |
Keywords: | |
本文献已被 SpringerLink 等数据库收录! |
|