Andreea- Lavinia Cazacu (Neamtu)
University of Craiova, Faculty of Economics and Business Administration, Finance Department, Romania
It should be noted that tax differentials between states provide multinational companies with a possibility of arbitration that allows them to minimize tax payments (Mooij et al., 2014). This study is about how multinational companies opt for transfer pricing in the presence of differentiated corporate tax rates in the context of economic globalization. A transfer price is a value placed on goods and services traded between divisions of an organization. Statements on transfer pricing on tax avoidance by multinationals are common, but in practice economic evidence is insufficient.
Growing globalization and the desire of companies to reduce their tax burden have made states adopt certain measures to protect their profits and somehow avoid moving the taxable base in jurisdictions with more favorable tax regimes. The current economic globalization can be assimilated to the reason for the existence of transfer prices and has brought not only advantages but also some disadvantages, such as the phenomenon of internationalization of economic criminality. But an empirical approach will help us focus on solutions to these issues, solutions that will help developing countries deal with transfer pricing issues in a way that is robust and fair for all parties involved.
Research methodology: The subject of this investigation is the transfer prices and their use in the context of economic globalization.
Investigation method: Research literature, laws, comparability analysis of risks associated with transfer prices, using the Orbis database. At the time of the transfer pricing analysis, english and romanian literature were used. As a research tool, we used the deductive method, the type of research being a fundamental one. This study does not discern a problem to solve it, but the importance of such research is reflected in its impact on the future developments of this research, providing prerequisites for future work.
Keywords: transfer pricing, economic globalization, arm length principle, affiliated companies, median value, risk comparability analysis associated with transfer pricing.
JEL Classification: F01, F
Publishing House : Yayınevi Hiperlink Eğitim İletişim Yayıncılık San. Paz. ve Tic. Ltd. Şti.