{
  "title": "At A Cost: the Real Effects of Transfer Pricing Regulations",
  "publication": "IMF Working Papers, March 23, 2018",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2018/03/23/at-a-cost-the-real-effects-of-transfer-pricing-regulations-45734",
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  "summary": "Unilateral adoption of transfer pricing regulations may have a negative impact on real investment by multinational corporations (MNCs).",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Unilateral adoption of transfer pricing regulations may have a negative impact on real investment by multinational corporations (MNCs).\n- The paper uses a quasi-experimental research design exploiting unique panel data on domestic and multinational companies in 27 countries during 2006-2014."
    },
    {
      "heading": "Key findings",
      "content": "- MNC affiliates reduce their investment by over 11 percent following the introduction of transfer pricing regulations.\n- There is no significant reduction in total investment by the MNC group, suggesting that these investments are most likely shifted to affiliates in other countries.\n- The impact of transfer pricing regulations corresponds to an increase in the \"TPR-adjusted\" corporate tax rate by almost one quarter."
    },
    {
      "heading": "Methodology highlights",
      "content": "- Research design: quasi-experimental.\n- Data: unique panel data on domestic and multinational companies in 27 countries during 2006-2014."
    },
    {
      "heading": "Policy implications and considerations",
      "content": "- Unilateral implementation of transfer pricing regulations can lead to reductions in affiliate-level investment without reducing overall MNC group investment, indicating relocation of investment across borders.\n- Policymakers should weigh the potential for investment shifting when considering unilateral transfer pricing regulations, as the effective \"TPR-adjusted\" corporate tax burden rises by almost one quarter for affected affiliates.\n\nSource: At A Cost: the Real Effects of Transfer Pricing Regulations, Ruud A. de Mooij and Li Liu, IMF Working Papers 2018, 069 (March 23, 2018).\n\n---\n\n Content in this bundle\n\n- At a Cost: The Real Effects of Transfer Pricing Regulations, WP/18/69, March 2018\n  - At a Cost: The Real Effects of Transfer Pricing Regulations, WP/18/69, March 2018 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - At a Cost: The Real Effects of Transfer Pricing Regulations, WP/18/69, March 2018 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2018/03/23/at-a-cost-the-real-effects-of-transfer-pricing-regulations-45734"
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    "Authors: Ruud A. de Mooij, Li Liu",
    "Published: March 23, 2018",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781484347539.001",
    "Unilateral adoption of transfer pricing regulations may have a negative impact on real investment by multinational corporations (MNCs).",
    "The paper uses a quasi-experimental research design exploiting unique panel data on domestic and multinational companies in 27 countries during 2006-2014.",
    "MNC affiliates reduce their investment by over 11 percent following the introduction of transfer pricing regulations.",
    "There is no significant reduction in total investment by the MNC group, suggesting that these investments are most likely shifted to affiliates in other countries.",
    "The impact of transfer pricing regulations corresponds to an increase in the \"TPR-adjusted\" corporate tax rate by almost one quarter.",
    "Research design: quasi-experimental.",
    "Data: unique panel data on domestic and multinational companies in 27 countries during 2006-2014.",
    "Unilateral implementation of transfer pricing regulations can lead to reductions in affiliate-level investment without reducing overall MNC group investment, indicating relocation of investment across borders.",
    "Policymakers should weigh the potential for investment shifting when considering unilateral transfer pricing regulations, as the effective \"TPR-adjusted\" corporate tax burden rises by almost one quarter for affected affiliates.",
    "**At a Cost: The Real Effects of Transfer Pricing Regulations, WP/18/69, March 2018**"
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