DOI
10.1016/S0897-3660(05)18010-6
Abstract
With the continued globalization of world markets, transfer pricing has become one of the dominant sources of controversy in international taxation. Cross-country differences in transfer pricing practices and regulations present challenges to taxing authorities and multinational enterprises (MEs). In the last two decades, tax authorities in the United States (U.S.) and other countries have brought major court cases against MEs accused of underpayment of taxes through transfer pricing practices. This paper discusses transfer pricing practices, regulatory agencies, penalties related to violations, and proper documentation required in the U.S. and one of its major trading partners, the United Kingdom (U.K.). The paper also examines the acceptable valuation methods allowed as a surrogate for arm's-length transactions as established by the country's regulatory agency. Finally, the paper discusses the similarities and differences between the major court cases related to transfer pricing in the two countries.
Document Type
Restricted Article: Campus only access
Publication Date
2005
Publisher Statement
Copyright © 2005, ScienceDirect.
DOI: https://doi.org/10.1016/S0897-3660(05)18010-6
The definitive version is available at: https://www.sciencedirect.com/science/article/pii/S0897366005180106
Recommended Citation
Rasoul H. Tondkar, Wendy W. Achilles, Joyce van der Laan Smith, Transfer Pricing Practices and Regulatory Actions in the U.S. and U.K.: A Cross-Country Comparison and Analysis, Advances in International Accounting, Volume 18, 2005, Pages 199-217. https://doi.org/10.1016/S0897-3660(05)18010-6