International income shifting regulations: empirical evidence from Australia and Canada

Transfer pricing: aligning the research agenda to organizational reality

“…With regards to the potential impact of transfer pricing regulation on the market valuation of MNEs, Eden et al (2005) find that the main impact of US transfer pricing penalties, even when aimed at Japanese MNEs in the USA, are found on the valuation of Japanese MNEs on the US Stock Market rather than on market returns in the home country of Japan. In a similar vein, Eldenburg et al (2003) find evidence of negative stock market reaction to the public announcement of tax regulation in Australia and Canada aimed at reducing income shifting between individual group companies.…”

Overhead cost allocation changes in a transfer pricing tax compliant multinational enterprise

“…A number of revisions have taken place since then, and many fiscal authorities around the world have responded by introducing their own transfer-pricing rules and regulations (Elliott and Emmanuel, 2000b). The external regulatory pressure on transfer pricing procedures in MNEs can be seen as a result of the increased volume of intra-company cross-border transfers (UNCTAD, 2003), which combined with corporate tax rate differentials has increased the financial incentive to shift income between tax jurisdictions (Eldenburg et al, 2003;Rahman and Scapens, 1986). In order to avoid such behavior, tax jurisdictions worldwide have implemented rules intended to prevent MNEs from establishing conditions in their intra-group relations that differ from those that would have been established had the group members acted as independent parties operating under market conditions.…”