Transfer pricing and state aid: The unintended consequences of advance pricing agreements / Lorraine Eden and William Byrnes.

Format:

Book

Government document

Author/Creator:

Eden, Lorraine, author.

Contributor:

Byrnes, William.

Language:

English

Subjects (All):

International Law and Justice.

Economic and Social Development.

International Trade and Finance.

Local Subjects:

International Law and Justice.

Economic and Social Development.

International Trade and Finance.

Physical Description:

1 online resource (28 pages)

Contained In:

Transnational Corporations Vol. 25, no. 2, p. 9-36 25:2<9 2076099X

Place of Publication:

New York : United Nations, 2018.

System Details:

data file

Summary:

An advance pricing agreement (APA) is a formal arrangement between a tax authority and a multinational enterprise (MNE) in which the parties jointly agree on the MNE's transfer pricing methodology, estimated taxable income, and tax payments for a fixed period, thus reducing the likelihood of an income tax dispute. We argue that APAs, which were developed by governments to solve MNE-state problems in one realm (international taxation of related party transactions), have had unintended consequences for both parties due to the spillover impacts of APAs into other policy realms. We explore this argument in the European Union state aid cases where, in the context of competition policy, APAs can be viewed as hidden, discretionary policies that can be misused by lower-tier governments to attract or retain inward foreign direct investment by offering individual MNEs preferential tax treatment. Our paper contributes to this literature by analyzing the unintended consequences of APAs and recommending policy changes to reduce these negative spillovers.

Notes:

Title from title screen (viewed May 1, 2017).

Access Restriction:

Restricted for use by site license.