Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/171058
Authors: 
Liu, Li
Schmidt-Eisenlohr, Tim
Guo, Dongxian
Year of Publication: 
2017
Series/Report no.: 
CESifo Working Paper 6594
Abstract: 
This paper employs unique data on export transactions and corporate tax returns of UK multinational firms and finds that firms manipulate their transfer prices to shift profits to lower-taxed destinations. It uncovers three new findings on tax-motivated transfer mispricing in real goods. First, transfer mispricing increases substantially when taxation of foreign profits changes from a worldwide to a territorial approach in the UK, with multinationals shifting more profits into low-tax jurisdictions. Second, transfer mispricing increases with a firm’s R&D intensity. Third, tax-motivated transfer mispricing is concentrated in countries that are not tax havens and have low-to-medium-level corporate tax rates.
Subjects: 
transfer pricing
corporate taxation avoidance
multinational firms
JEL: 
F23
H25
H32
Document Type: 
Working Paper

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