draining development.pdf - Khazar University

528 IndexPak and Zdanowicz’s approach to,323–26product definitions and, 323–24, 325tquantifying extent of, 311quantity faking, 326tax-induced international profitsharing,studies of, 114–19time, variations in price over, 326TPM, empirical evidence of, 217–23,219ftrade partners involved in, 326transaction-level price data as meansof studying, 323–26, 325tunreported trade, 313trade taxes and TPM, 213–14transaction-level price data as means ofstudying trade mispricing,323–26, 325ttransfer pricing and transfer pricemanipulation (TPM), 11–13,205–28, 235–63, 265–305accounts and financial statements,hiding of sums in, 288–95, 302ALP. See arm’s-length principle(ALP) for transfer pricingbusiness restructuring and, 245–46CITs and, 207, 208, 210–13, 216–18,221–26defined, 11, 206, 210, 303n1developing countriesempirical evidence of TPM in,223–27, 249–54global tax planning in, 247–49impact on, 251–54, 258n4likely effective tax rates ofmultinational corporations,determining, 278–83, 279fpolicy responses for, 254–56, 256brisk of TPM in, 285–88empirical evidence offrom developed countries, 215–23from developing countries,223–27, 249–54income shifting studies, 216–17trade mispricing studies, 217–23,219festimated losses from, 266–70extractive industries, proneness toTPM in, 285–88, 301foreign exchange controls and, 214government regulation of, 206,207–9, 212–15likely effective tax rates of multinationalcorporations, 271–83data sources for, 271developing-country perspectiveon, 278–83, 279fmethodology for analyzing, 271–72results of analysis, 272–78, 273f,275–78fweighted by gross domesticproduct, 275–76, 275flocal economies, impact on, 251management foresight versus abusivetransfer pricing, 238bplausibility of substantial use of,279–83, 301–3policy responses for, 254–56, 256b,491–92political risk and, 214–15profit-maximizing transfer price,choosing, 210–11risk of being caught, 283–85, 301–3scale and incidence of, 206–7tax avoidance and evasion via,244–49, 250, 254tax collection, impact on, 251–54,258n4tax havens and, 208, 249, 276–77,279, 287f, 296–301, 298f, 300f,302–3tax holidays and, 213, 224–25trade taxes and, 213–14windfall profits, managing, 246–47Transparency International, 2, 397,452n36–37