Analyses on Multinationals' Tax Avoidance and the Arm's Length Principle: Viewpoints from Product Differentiation

2022 Fiscal Year Final Research Report

• Project/Area Number: 20K22122
• Research Category: Grant-in-Aid for Research Activity Start-up
• Allocation Type: Multi-year Fund
• Review Section: 0107:Economics, business administration, and related fields
• Research Institution: Okayama University
• Principal Investigator: Okoshi Hirofumi 岡山大学, 社会文化科学学域, 講師 (90880295)
• Project Period (FY): 2020-09-11 – 2023-03-31
• Keywords: 移転価格 / 独立企業間価格原則 / 製品差別化 / 研究開発投資 / 企業立地

Outline of Final Research Achievements

This research project revisits an multinational enterprise's (MNE's) tax avoidance behavior from the viewpoint of research and development (R&D) investment for product differentiation. In particular, as MNEs conduct more R&D which generates firm-specific goods/intangible asset, it becomes difficult for tax authorities to find comparable uncontrolled transactions to compare arm's length prices with transfer prices and to audit MNEs' tax avoidance behavir. As a result of the project, it is revealed that tightening transfer pricing regulation under sufficiently strict regulation can worsen welfare in a high-tax country.

Free Research Field

国際課税

Academic Significance and Societal Importance of the Research Achievements

多国籍企業による租税回避行動は、OECD諸国が近年議論を重ねるほどの重要な国際課税のトピックであり、移転価格規制の強化は必要な処置だと期待されている。本研究成果は移転価格規制がもたらしうる望ましくない効果に着目をすることで、移転価格規制の議論やルール策定の際に注意すべき点を明らかにするものであり、政策立案に重要な示唆を与えるものである。