Transfer pricing and global poverty

Journal Article (Review;Journal)

Transfer pricing will require the emergence of an international institution, a global agreement that guards against the race to the bottom by standardizing treatment of MNCs by developing countries. Without an international solution, developing countries will be forced to make up to the loss revenue elsewhere. Because most of these countries are characterized by weak tax capacity, making collection of income taxes difficult. Actually, transfer pricing is just the act of assigning internal prices for goods and services that are sold within a company and between subsidiaries of the same company. A transfer price should match either what the seller would charge an independent, external customer, or what the buyer would pay an independent, external supplier. Although it is hard to know for certain, there is strong reason to believe that transfer pricing activities may be reducing the developmental impact of FDI (foreign direct investment) flows.

Full Text

Duke Authors

Cited Authors

  • Malesky, EJ

Published Date

  • December 1, 2015

Published In

Volume / Issue

  • 17 / 4

Start / End Page

  • 669 - 677

Electronic International Standard Serial Number (EISSN)

  • 1468-2486

International Standard Serial Number (ISSN)

  • 1521-9488

Digital Object Identifier (DOI)

  • 10.1111/misr.12269

Citation Source

  • Scopus