Transfer pricing auditing and tax forestalling by Multinational Corporations: A game theoretic approach

The problem of revenue leakages through transfer pricing remains unabated, and an examination of possible causes is a continuum. This study provides a nuanced examination of the interaction between MNCs and the tax consultants (TCs) which is treated with mixed views in the existing literature. The r...

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Autores principales:	Eukeria Mashiri, Shewangu Dzomira, Dzingirai Canicio
Formato:	article
Lenguaje:	EN
Publicado:	Taylor & Francis Group 2021
Materias:	game theory mncs abusive transfer pricing tax consultant aggressive tax planning nash and bayesian equilibrium Business HF5001-6182 Management. Industrial management HD28-70
Acceso en línea:	https://doaj.org/article/e2ff920fd40c4723bb32287d8b19296e
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spelling	oai:doaj.org-article:e2ff920fd40c4723bb32287d8b19296e2021-12-02T17:26:04ZTransfer pricing auditing and tax forestalling by Multinational Corporations: A game theoretic approach2331-197510.1080/23311975.2021.1907012https://doaj.org/article/e2ff920fd40c4723bb32287d8b19296e2021-01-01T00:00:00Zhttp://dx.doi.org/10.1080/23311975.2021.1907012https://doaj.org/toc/2331-1975The problem of revenue leakages through transfer pricing remains unabated, and an examination of possible causes is a continuum. This study provides a nuanced examination of the interaction between MNCs and the tax consultants (TCs) which is treated with mixed views in the existing literature. The role of TCs in aiding and abetting taxpayers into abusive transfer pricing (TP) has implications for policy especially in situations where the tax administration systems are porous. Based on a theoretical review (deductive theorising) the study moves from exploring broad and general aspects of the game theory to applying them to tax forestalling through TP by Multinational Corporations (MNCs). The study critiques the assumptions of game theory and explores the influence of TCs in TP decision making processes by MNCs. It gives a theoretical explanation (interpretive phenomenology) on game theory attempting to promote a deeper understanding of TP by MNCs. The study contributes to knowledge by exploring a confluence of three TP-related aspects which have been treated in isolation in existing literature. The findings show that the tacit collusion between TCs and MNCs sanitise the abusive TP activities by minimising the chances of the MNCs shenanigans being recognised by the tax authority due to information asymmetry. Further, the mediating role of TCs is polarised and benefits the TCs and the MNCs who will share the spoils at the expense of the tax authority.Eukeria MashiriShewangu DzomiraDzingirai CanicioTaylor & Francis Grouparticlegame theorymncsabusive transfer pricingtax consultantaggressive tax planningnash and bayesian equilibriumBusinessHF5001-6182Management. Industrial managementHD28-70ENCogent Business & Management, Vol 8, Iss 1 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	game theory mncs abusive transfer pricing tax consultant aggressive tax planning nash and bayesian equilibrium Business HF5001-6182 Management. Industrial management HD28-70
spellingShingle	game theory mncs abusive transfer pricing tax consultant aggressive tax planning nash and bayesian equilibrium Business HF5001-6182 Management. Industrial management HD28-70 Eukeria Mashiri Shewangu Dzomira Dzingirai Canicio Transfer pricing auditing and tax forestalling by Multinational Corporations: A game theoretic approach
description	The problem of revenue leakages through transfer pricing remains unabated, and an examination of possible causes is a continuum. This study provides a nuanced examination of the interaction between MNCs and the tax consultants (TCs) which is treated with mixed views in the existing literature. The role of TCs in aiding and abetting taxpayers into abusive transfer pricing (TP) has implications for policy especially in situations where the tax administration systems are porous. Based on a theoretical review (deductive theorising) the study moves from exploring broad and general aspects of the game theory to applying them to tax forestalling through TP by Multinational Corporations (MNCs). The study critiques the assumptions of game theory and explores the influence of TCs in TP decision making processes by MNCs. It gives a theoretical explanation (interpretive phenomenology) on game theory attempting to promote a deeper understanding of TP by MNCs. The study contributes to knowledge by exploring a confluence of three TP-related aspects which have been treated in isolation in existing literature. The findings show that the tacit collusion between TCs and MNCs sanitise the abusive TP activities by minimising the chances of the MNCs shenanigans being recognised by the tax authority due to information asymmetry. Further, the mediating role of TCs is polarised and benefits the TCs and the MNCs who will share the spoils at the expense of the tax authority.
format	article
author	Eukeria Mashiri Shewangu Dzomira Dzingirai Canicio
author_facet	Eukeria Mashiri Shewangu Dzomira Dzingirai Canicio
author_sort	Eukeria Mashiri
title	Transfer pricing auditing and tax forestalling by Multinational Corporations: A game theoretic approach
title_short	Transfer pricing auditing and tax forestalling by Multinational Corporations: A game theoretic approach
title_full	Transfer pricing auditing and tax forestalling by Multinational Corporations: A game theoretic approach
title_fullStr	Transfer pricing auditing and tax forestalling by Multinational Corporations: A game theoretic approach
title_full_unstemmed	Transfer pricing auditing and tax forestalling by Multinational Corporations: A game theoretic approach
title_sort	transfer pricing auditing and tax forestalling by multinational corporations: a game theoretic approach
publisher	Taylor & Francis Group
publishDate	2021
url	https://doaj.org/article/e2ff920fd40c4723bb32287d8b19296e
work_keys_str_mv	AT eukeriamashiri transferpricingauditingandtaxforestallingbymultinationalcorporationsagametheoreticapproach AT shewangudzomira transferpricingauditingandtaxforestallingbymultinationalcorporationsagametheoreticapproach AT dzingiraicanicio transferpricingauditingandtaxforestallingbymultinationalcorporationsagametheoreticapproach
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Transfer pricing auditing and tax forestalling by Multinational Corporations: A game theoretic approach

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