Fuzzy Transfer Pricing World: On the Analysis of Transfer Pricing with Fuzzy Logic Techniques

Tucha, Tomas; Brem, Markus

doi:10.2139/ssrn.874566

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

See all articles by Tomas Tucha

Tomas Tucha

Indian Institute of Management, Ahmedabad

Markus Brem

GTP GlobalTransferPricing Business Solutions GmbH; University of Augsburg

Date Written: January 1, 2006

Abstract

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

Suggested Citation: Suggested Citation

Tucha, Tomas and Brem, Markus, Fuzzy Transfer Pricing World: On the Analysis of Transfer Pricing with Fuzzy Logic Techniques (January 1, 2006). IIMA Working Paper No. 2005-12-03, Available at SSRN: https://ssrn.com/abstract=874566 or http://dx.doi.org/10.2139/ssrn.874566