Transfer Pricing In Multinational Companies And Its Impact On Taxation: A Comprehensive Analysis

K Gnanasoundar, Sastra Deemed University

Shruthi B, Sastra Deemed University

ABSTRACT

This Paper studies the complex realm of transfer pricing tactics used by multinational corporations (MNCs) and their significant effects on taxation. As MNCs conduct business internationally, they engage in intercompany transactions, which raise questions regarding the equitable distribution of profits and potential tax evasion. This study sheds light on key factors that influence this dynamic landscape by thoroughly examining the complex link between transfer pricing practices and taxation.

This paper covers an in-depth analysis of the area by looking at real-world case studies and providing insights into the transfer pricing difficulties MNCs confront in emerging nations and the digital economy. It also discusses the use of aggressive tax planning techniques and tax havens, focusing on the moral and legal implications of these actions and the methods and strategies used by MNCs to allocate profits among their subsidiaries are next examined, taking into account the valuation of intangible assets, intra-group financing, and supply chain optimization.

This research advances knowledge of the intricate connection between transfer pricing in multinational corporations and its effects on taxation. It emphasizes the need for a well-rounded strategy that supports equitable taxes, fosters economic expansion, and guarantees an even playing field for all participants in the global tax system.