IDEAS home Printed from https://ideas.repec.org/a/ovi/oviste/vxiiy2012i1p1258-1263.html
   My bibliography  Save this article

Transfer Pricing: Alibi for Cross-Border Tax Evasion

Author

Listed:
  • Georgescu Iuliana Eugenia

    (Doctoral School of Economics, Faculty of Economics and Business Administration, Alexandru Ioan Cuza University of Iaºi, Romania)

  • Afrãsinei Mihai-Bogdan

    (Doctoral School of Economics, Faculty of Economics and Business Administration, Alexandru Ioan Cuza University of Iaºi, Romania)

Abstract

In order to maximise profit and to reduce the burden of tax in the jurisdictions with high tax, many of the multinational companies abuse transfer pricing by directing the profit towards subsidiaries which are localised in more favourable jurisdictions from this point of view. The cross-border transactions effectuated, more exactly the mechanisms used to establish the transfer pricing involved in them, vary from the perfectly legal to the illegal ones and very often it is almost impossible for the tax authorities to contest them. The purpose of this paper is to analyse the mechanisms and practices of determining transfer pricing and their effects on the financial flows at the international level. The conclusions emphasize both the role played by transfer pricing in tax optimization and in cross-border tax evasion.

Suggested Citation

  • Georgescu Iuliana Eugenia & Afrãsinei Mihai-Bogdan, 2013. "Transfer Pricing: Alibi for Cross-Border Tax Evasion," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(1), pages 1258-1263, May.
    • Handle: RePEc:ovi:oviste:v:xii:y:2012:i:1:p:1258-1263
    as

    Download full text from publisher

    File URL: http://stec.univ-ovidius.ro/html/anale/ENG/cuprins%20rezumate/volum2013p1.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    transfer pricing; tax optimization; tax evasion; multinational companies;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ovi:oviste:v:xii:y:2012:i:1:p:1258-1263. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gheorghiu Gabriela (email available below). General contact details of provider: https://edirc.repec.org/data/feoviro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.