Transfer Pricing

Identifier:  TFG:1086

Handle: https://hdl.handle.net/20.500.11797/TFG1086

Authors:  Mir Castro, Josep

Abstract:
The current economic system, framed in a wild capitalism, has resulted in forcing employers to try to get the maximum benefits in their business. The main tool for achieving this is to frame their business in a globalized world, trying to locate subsidiaries in countries with cheap labor and favorable socio-political conditions in order to obtain higher profit margins. However, in recent years there are many corporate groups that, especially at international level, act with similar attitudes to the rest, placing subsidiaries where they are most interested in, but crossing the red line in terms of purpose: not only to obtain higher margins, but they do to focus profits, causing transactions between subsidiaries of different groups so as to pay the taxes where they are most interested. The result is that these corporations not pay where they should do that for the activities they realize. The transfer pricing regulation is in constant evolution during the recent years, and we can see an attitude from lots of countries with the purpose to stop this abuse and manipulations. But the reality is that these kind of abuses are still alive. However, we are still not concerned about the problem.