Transfer Pricing

17 Pages Posted: 11 Feb 2013  

Jahlesha Gilbert

Fayetteville State University - School of Business and Economics

Henry P. McMillan

Fayetteville State University - School of Business and Economics

K. Berrak Walters

Fayetteville State University - School of Business and Economics

Date Written: February 5, 2013

Abstract

This paper examines transfer pricing in general. First, three different approaches to transfer pricing options and their advantages and disadvantages are investigated. Based on the analysis, it is difficult to make recommendations on the best transfer pricing methods. Next, the international aspect of transfer pricing is examined. This paper illustrates that transfer pricing is a major issue in multinational organizations, since transfer pricing plays a major role in corporate taxation strategies. Also, ethical issues in regard to transfer pricing and its effects on personnel is examined in this paper. It is concluded that transfer pricing can create conflicts; however, it is a tool for performance evaluation and can motivate personnel and align corporate and personnel goals when practiced strategically.

Keywords: corporate taxation, decentralization, international business, multinational, responsibility centers, transfer pricing

JEL Classification: D01, F23, H21, H25, H73, H87, K34, L11, L14, L2, M4

Suggested Citation

Gilbert, Jahlesha and McMillan, Henry P. and Walters, K. Berrak, Transfer Pricing (February 5, 2013). Available at SSRN: https://ssrn.com/abstract=2215015 or http://dx.doi.org/10.2139/ssrn.2215015

Jahlesha Gilbert

Fayetteville State University - School of Business and Economics ( email )

Fayetteville, NC 28301
United States

Henry P. McMillan

Fayetteville State University - School of Business and Economics ( email )

Fayetteville, NC 28301
United States

K. Berrak Walters (Contact Author)

Fayetteville State University - School of Business and Economics ( email )

Fayetteville, NC 28301
United States

HOME PAGE: http://www.uncfsu.edu/sbe

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