Inefficiencies of Bilateral Advanced Pricing Agreements (BAPA) in Taxing Multinational Companies

@article{Tomohara2004InefficienciesOB,
  title={Inefficiencies of Bilateral Advanced Pricing Agreements (BAPA) in Taxing Multinational Companies},
  author={A. Tomohara},
  journal={National Tax Journal},
  year={2004},
  volume={57},
  pages={863 - 873}
}
While regulations on tax evasion via transfer pricing have been thoroughly explored in the literature, little is known about the effects of domestic tax policies under a Bilateral Advanced Price Agreement (hereafter BAPA) on production decisions of multinational companies. I show that, even if BAPAs prohibit income shifting through transfer pricing, inefficiencies arise via distorted production when markets across countries are interrelated through intra-firm trade of multinational companies… Expand
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