Transfer Pricing Aggressiveness and Financial Derivatives Practices: Empirical Evidences from United Kingdom

Multinational corporations (MNCs) have long taking consideration into transfer pricing as a critical aspect of their tax management policies. The present study aims to identify the influence of intra-group financing using derivatives instruments on transfer pricing aggressiveness. Based on a selecti...

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Bibliographic Details
Main Author:	dos Santos, Ricardo Jorge Sebastião
Format:	Dissertation
Language:	English
Published:	ProQuest Dissertations & Theses 01-01-2016
Subjects:	Aggressiveness Behavioral psychology Economics European Studies Interest rates Multinational corporations Tax havens Tax rates
Online Access:	Get full text
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Summary:	Multinational corporations (MNCs) have long taking consideration into transfer pricing as a critical aspect of their tax management policies. The present study aims to identify the influence of intra-group financing using derivatives instruments on transfer pricing aggressiveness. Based on a selective sample of 117 publicly listed U.K. multinational enterprises over 2006 and 2014(1053 firms years observations), the regression model indicates derivatives to be significantly associated with transfer pricing aggressiveness behaviors. More specifically, interest rates and foreign exchange rates volatility have a positive contribution on magnifying international transfer pricing aggressiveness. Additionally, the multinationality of MNCs also exhibits a significant impact on entities tax governance. The overall empirical findings present reasonable results augmented by an additional analysis with recourse to effective tax measures.
ISBN:	9798382375779