Fuzzy Transfer Pricing World: On the Analysis of Transfer Pricing with Fuzzy Logic Techniques
IIMA Working Paper No. 2005-12-03
22 Pages Posted: 10 Jan 2006
Date Written: January 1, 2006
The arm's length analysis of international transfer prices of multinational firms lacks sound methodological approach of the so-called function and risk analysis. In practice, such analyses are descriptive. Derived from Zadeh's mathematical theory of fuzzy sets, this paper investigates a quantitative approach to identify the function and risk pattern of related parties of multinational companies. We illustrate our fuzzy logic approach with a simple case.
Keywords: Function and risk analysis, fuzzy logic theory, multinational company, transaction costs, transfer pricing
JEL Classification: C69, D49, L29, M21
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