Globalization, Multinationals and Tax Base Allocation: Advance Pricing Agreements as Shifts in International Taxation?

IIMA Working Paper No. 2005-12-01

26 Pages Posted: 11 Jan 2006

See all articles by Markus Brem

Markus Brem

GTP GlobalTransferPricing Business Solutions GmbH; University of Augsburg

Date Written: December 2005

Abstract

This paper elaborates on the emergence of so-called Advance Pricing Agreements (APA) in international taxation and corresponding APA programs in individual countries. It refers to how globalizing business processes trigger governance change on the nation state level regarding the identification and allocation of the tax base of multinational companies. The introduction of APA programs and the generation of APAs are considered to be an example of such governance change. On the basis of a governance choice model, the paper seeks to identify factors which might explain variation in the evolution of national APA programs and the implementation of individual APAs between the taxpayer and the tax authorities. Differences in institutions, economic conditions, and the actors involved are important in explaining variation across countries.

Keywords: Advance pricing agreement, multinational companies, transfer pricing, international taxation, cooperation, non-bureaucratic, governance choice

JEL Classification: F02, H11, H87, K34, L14

Suggested Citation

Brem, Markus, Globalization, Multinationals and Tax Base Allocation: Advance Pricing Agreements as Shifts in International Taxation? (December 2005). IIMA Working Paper No. 2005-12-01, Available at SSRN: https://ssrn.com/abstract=874567 or http://dx.doi.org/10.2139/ssrn.874567

Markus Brem (Contact Author)

GTP GlobalTransferPricing Business Solutions GmbH ( email )

Wertinger Straße 40
86368 Gersthofen (Augsburg)
Germany
+49 (821) 9089979 - 0 (Phone)
+49 (821) 9089979 - 89 (Fax)

HOME PAGE: http://www.GlobalTransferPricing.com

University of Augsburg ( email )

Universitätsstr. 2
Augsburg, 86159
Germany

HOME PAGE: http://https://www.uni-augsburg.de/de/fakultaet/wiwi/prof/bwl/schultze/team/markus-brem/

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