Purpose: This study investigates the impact of different transfer pricing rules on tax-induced profit shifting. Existing studies create different enforcement rankings of countries based on specific transfer pricing provisions on the assumption that larger penalties and more extensive...

This paper analyzes the optimal level of transfer pricing manipulation when the expected tax penalty is a function of the tax enforcement and the market price parameter, and the multinational enterprise is subjected to distinct rules of foreign profit taxation. The application of the arm's...

This paper analyses the characteristics of transfer pricing systems across countries, in order to identify the grouping structures intrinsically related with rules' similarities, and to explore the key characteristics revealed by each group. Applying hierarchical agglomerative technique for...

This paper analyzes the optimal level of transfer pricing manipulation when the expected tax penalty is a function of the tax enforcement and the market price parameter, and the multinational enterprise is subjected to distinct rules of foreign profit taxation. The application of the arm’s...

This note proposes the segregation of independent endogenous and exogenous components of tax penalty probability to introduce a formal demonstration that enforcement and tax penalties are negatively related with income shifting.