Uncertainty in transfer pricing tax rules : the role of APAs
Rogers, Helen, Ph.D. (2009) Uncertainty in transfer pricing tax rules : the role of APAs. PhD thesis, University of Warwick.Full text not available from this repository.
Official URL: http://webcat.warwick.ac.uk/record=b2491816~S15
Transfer pricing is an important issue for transnational enterprises (TNEs) seeking to comply with the different, inconsistent, tax rules of different nation states. The objective of this research is to examine the emergence of transfer pricing practice after the introduction of new tax rules in the US and the UK from the mid-1990s onwards and the issuing of the transnational OECD Transfer Pricing Guidelines in 1995. These rules require the use of the arm’s length principle, which is very broad, giving rise to considerable uncertainty as to how it should be interpreted, complied with and applied. These rules also include provision for Advance Pricing Agreements (APAs). An APA is a mechanism to provide certainty in advance of the appropriate application of the general arm’s length principle so that the relevant transfer prices will not be challenged by the tax authorities. As part of this research the APA procedure was focussed, on seeking to gain an insight into the operation of the relatively new APA process between the UK and US. The objective of this research is to gain a deeper understanding of this practice and consider how practice is helping to construct a common understanding of the rules, and vice versa. This research makes a contribution to the current literature by obtaining and analysing rich interview data from a novel combination of interviewees: elite individuals working in different organisations and different nations in the field of transfer pricing. Through this empirical work an insight is gained into the developing common understanding and practice that supplements the written rules. Building on literature that recognises the indeterminacy and ambiguity of the law and the way in which law and compliance is socially constructed, elements of the elite’s common understanding and some of the ways in which this then evolves into accepted practice are analysed, with particular reference to the APA process. The interview data indicates that in practice there is a high level of discretion, the extent of which cannot be discerned from the written rules and agreements. However, the written rules act as a form of constraint, so that this discretion is not unfettered. Also, there is a further theoretical contribution from this thesis. In addition to research on the indeterminacy of law, in seeking to understand the transfer pricing elite, theories of the professions and epistemic communities are drawn on. The application of these different theories concomitantly is new in the transfer pricing literature. The elite is identified as operating as an epistemic, trans-professional transnational community. Abbott’s (1988) theory of professions, with its emphasis on the importance of abstract knowledge, such as ambiguous transfer pricing rules, and control of that knowledge system, is extended, by identifying and analysing the use this epistemic community makes of control of the outputs of the knowledge system: privileged, bespoke agreements.
|Item Type:||Thesis or Dissertation (PhD)|
|Subjects:||H Social Sciences > HD Industries. Land use. Labor|
|Library of Congress Subject Headings (LCSH):||Transfer pricing -- Taxation -- Great Britain, Transfer pricing -- Taxation -- United States|
|Institution:||University of Warwick|
|Theses Department:||Warwick Business School|
|Supervisor(s)/Advisor:||Oats, Lynne ; Lamb, Margaret (Margaret Anne) ; Ahrens, Thomas|
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