scholarly journals Transfer Pricing as Tax Avoidance Under Different Legislative Schemes

2017 ◽  
Author(s):  
Carolin Holzmann
Keyword(s):  
Transfer Pricing ◽  
Tax Avoidance

Thin Capitalization, Transfer Pricing Aggresiveness, Penghindaran Pajak

2018 ◽  
Vol 2 (1) ◽  
pp. 1-28
Author(s):  
Teza Deasvery Falbo ◽  
Amrie Firmansyah
Keyword(s):  
Regression Analysis ◽  
Linear Regression ◽  
Stock Exchange ◽  
Transfer Pricing ◽  
Linear Regression Analysis ◽  
Tax Avoidance ◽  
Total Sample ◽  
Multiple Linear Regression Analysis ◽  
Tax Revenue ◽  
Thin Capitalization

The increase in tax revenue in Indonesia is not accompanied by an increase in tax ratio The low tax ratioindicatestax avoidance practices in Indonesia. Some tax avoidance practices can be conductedthrough transferpricing and thin capitalization.This study is aimed to examine empirically the effect of thin capitalization as well astransfer pricing aggressiveness on tax avoidance practice in Indonesia. This study uses manufacturing companieswhich are listed on Indonesia Stock Exchange (IDX) within the period 2013-2015. Using purposive sampling, theselected samples in this study are 90 companies, so the total sample is 270 samples. The hypothesis examinationused in this study is multiple linear regression analysis of panel data.The results of this study suggest that thincapitalization is positively associated with tax avoidance,while transfer pricing aggressivenessis not associated withtax avoidance.

scholarly journals The Use of International Tax Planning in Subsidiaries from the Financial and ICT Sectors in the Czech Republic

2021 ◽  
Vol 24 (1) ◽  
pp. 182-196
Author(s):  
Vít Jedlička
Keyword(s):  
Global Economy ◽  
Transfer Pricing ◽  
Tax Avoidance ◽  
Tax Planning ◽  
Tax Burden ◽  
Effective Tax Rate ◽  
Tax Havens ◽  
Tax Rate ◽  
Dummy Variable ◽  
International Tax

Tax avoidance is an important element of management in the global economy. Managers use tax havens for reducing a company’s effective tax rate. The most common practices in international tax planning can be divided into three groups: loans and their related interest, royalties, and transfer pricing. The aim of this article is to find the determinants of the tax burden faced by foreign-owned subsidiaries. Therefore, a model was created for the tax burden, focusing on the special position of subsidiaries within international tax planning. For this purpose, taxes/outcomes was established as a new dependent variable. The panel data used include Czech companies that are owned by parent companies located in other EU countries. The model distinguishes EU tax havens from regular member states; sector dummy variables are also included. The regression model that was created did not confirm the assumed dependencies. Rather, it indicated other important determinants: profitability, the share of intangible assets, size, and the dummy variable for the ICT sector. Based on the regression results, the independent variables connected with known tax planning schemes have relatively low importance. The significance of these results can be seen in the subsequent conclusions. First of all, there is no difference between the subsidiaries’ tax burdens based on the parent company’s location. Corporations use international tax planning whether or not they are owned from a tax haven. The second significant conclusion indicates the importance of certain sectors and their attributes concerning the tax burden. Companies from the ICT sector are linked to a lower tax burden. On the other hand, the dependencies within the financial sector are not statistically significant. From the perspective of further research, it would be constructive to incorporate the subsidiary’s position within the group.

Transfer Pricing and Location of Intangibles - Spillover and Tax Avoidance through Profit Shifting

2020 ◽  
Author(s):  
Rebecca Reineke ◽  
Katrin Weiskirchner-Merten
Keyword(s):  
Empirical Evidence ◽  
Transfer Pricing ◽  
Home Bias ◽  
Tax Avoidance ◽  
Optimal Location ◽  
The Other ◽  
Profit Shifting ◽  
Tax Rate ◽  
Length Range ◽  
A Company

This study examines how spillovers affect a multinational company's choice of an intangible's location and the corresponding transfer price for using this intangible. Our model uses a company with a domestic division in a high-tax country and a foreign division in a low-tax country, where each division's activities generate spillovers on the other division's income. In contrast to previous studies, our analysis incorporates an intangible's optimal location when the company trades off tax minimization and efficient activities. By locating the intangible abroad, the company reduces its tax liability, whereas locating the intangible domestically yields more efficient domestic division activities. For a high spillover of the domestic division, the company locates the intangible domestically. Our model supports empirical evidence regarding intangibles' location that is interpreted as "home bias". Additionally, we show how variations in regulatory parameters-arm's length range and tax rate differential-affect the divisions' activities and the intangible's location.

Challenges of Monitoring Tax Compliance by Multinational Firms: Evidence from Chile

2019 ◽  
Vol 109 ◽  
pp. 500-505
Author(s):  
Sebastián Bustos ◽  
Dina Pomeranz ◽  
José Vila-Belda ◽  
Gabriel Zucman
Keyword(s):  
Multinational Firms ◽  
Transfer Pricing ◽  
Tax Avoidance ◽  
Tax Compliance ◽  
Tax Rates ◽  
Profit Shifting ◽  
Effective Tax Rates ◽  
Arm’S Length Principle ◽  
Debt Shifting

This paper reviews common challenges of taxing multinational firms, using Chile as a case study. We briefly describe key international tax avoidance methods: profit shifting to low-tax jurisdictions through transfer pricing and debt shifting. We discuss the prevalent policy to tax multinationals--the arm's length principle--and alternative proposals using apportionment formulas. Novel data from Chile show that multinationals make up a large share of GDP but report lower profit and effective tax rates than local firms. In 2011, Chile implemented a reform following OECD guidelines to enforce the arm's length principle. We discuss potential effects on tax collection and welfare.

scholarly journals Framing the tax and health nexus: a neglected aspect of public health concern

2017 ◽  
Vol 12 (2) ◽  
pp. 179-194 ◽  
Author(s):  
David Mccoy ◽  
Simukai Chigudu ◽  
Taavi Tillmann
Keyword(s):  
Health Inequalities ◽  
Transfer Pricing ◽  
Tax Avoidance ◽  
Health Concern ◽  
Health Improvement ◽  
Full Potential ◽  
Banking Secrecy ◽  
Shadow Economies ◽  
Health Practitioners ◽  
Improve Health

AbstractPrevious studies have described various associations between tax policy and health. Here we propose a unifying conceptual framework of ‘Five R’s’ to stimulate awareness about the importance of tax to health improvement. First, tax can improverepresentationand democratic accountability, and help make governments more responsive to the needs of its citizens. Second, tax can create arevenuestream for a universal pool of public finance for health care and other public services. Third, progressive taxation when combined with appropriate public spending can helpredistributewealth and income and mitigate social and health inequalities. Fourth, there-pricingof harmful products (e.g. tobacco, alcohol and unhealthy food) can help reduce their consumption. Fifth, taxation provides a route by which certain harmful industries can beregulated. The paper also discusses the barriers that hinder the full potential for taxation to be used to improve health, including: weak tax administrations, large ‘shadow economies’, international trade liberalisation, tax avoidance, transfer pricing by transnational corporations and banking secrecy. We suggest that a greater awareness of the manifold associations between tax and health will encourage health practitioners to actively promote fairer and better taxation, thereby helping to improve health and reduce health inequalities.

scholarly journals When Does Tax Avoidance Result in Tax Uncertainty?

2018 ◽  
Vol 94 (2) ◽  
pp. 179-203 ◽  
Author(s):  
Scott D. Dyreng ◽  
Michelle Hanlon ◽  
Edward L. Maydew
Keyword(s):  
Transfer Pricing ◽  
Tax Avoidance ◽  
Pricing Strategies ◽  
Tax Rates ◽  
Effective Tax Rates ◽  
Time Period ◽  
Tax Haven ◽  
Tax Benefits ◽  
Tax Uncertainty

ABSTRACT We investigate the relation between tax avoidance and tax uncertainty, where tax uncertainty is the amount of unrecognized tax benefits recorded over the same time period as the tax avoidance. On average, we find that tax avoiders, i.e., firms with relatively low cash effective tax rates, bear significantly greater tax uncertainty than firms that have higher cash effective tax rates. We find that the relation between tax avoidance and tax uncertainty is stronger for firms with frequent patent filings and tax haven subsidiaries, proxies for intangible-related transfer pricing strategies. The findings have implications for several puzzling results in the literature.

scholarly journals Determinan Penghindaran Pajak Dengan Corporate Social Responsibility Sebagai Variabel Moderasi

1970 ◽  
Vol 4 (02) ◽  
pp. 182-194
Author(s):  
Purwoko Erie Dharmawan ◽  
Syahril Djaddang ◽  
Darmansyah Darmansyah
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Significant Influence ◽  
Transfer Pricing ◽  
Tax Avoidance ◽  
Secondary Data ◽  
Jel Classification ◽  
Tax Haven ◽  
Corporate Social ◽  
Thin Capitalization

ABSTRACT This study aimed to analyze the influence of transfer pricing, thin capitalization, dan tax haven utilization against tax avoidance. This sudy also uses corporate social responsibility as a moderating variable. This study uses secondary data from manufacturing listed company during period of 2014-2016. Samples taken by using purposive sampling method and obtain 189 sampel consist of 63 companies during three years period. The method of testing the data used in this study is panel data regression analysis and descriptive statistics. The result showed that the transfer pricing has significant effect on tax avoidance, while thin capitalization dan tax haven utilization has no significant effect on tax avoidance. Corporate social responsibility has significant influence as moderating between transfer pricing and tax avoidance, but corporate social responsibility has no significant influence as moderating between thin capitalization dan tax haven utilization and tax avoidance. ABSTRAK Penelitian ini bertujuan untuk mengetahui pengaruh transfer pricing, thin capitalization, dan tax haven utilization terhadap penghindaran pajak. Peneltian ini juga menggunakan variabel corporate social responsibility sebagai variabel yang memoderasi pengaruh transfer pricing, thin capitalization, dan tax haven utilization terhadap penghindaran pajak. Studi ini menggunakan data sekunder dari perusahaan manufaktur yang terdaftar di bursa efek indonesia. Pengambilan sampel dilakukan dengan metode purposive samping. Sampel yang diperoleh sebanyak 189 sampel, terdiri dari 63 perusahaan manufaktur selama periode tiga tahun yaitu 2014 – 2016. Metode analisis yang digunakan dalam mengolah data menggunakan analisis regresi data panel. Hasil penelitian menunjukkan bahwa transfer pricing berpengaruh signifikan terhadap penghindaran pajak, sementara thin capitalization dan tax haven utilization tidak berpengaruh signifikan terhadap penghindaran pajak. Corporate social responsibility dapat memoderasi pengaruh transfer pricing terhadap penghindaran pajak, namun corporate social responsibility tidak dapat memoderasi pengaruh thin capitalization dan tax haven utilization terhadap penghindaran pajak. JEL Classification: MH14, H26, H32

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