Transfer pricing and the decision-making authority of the tax function in multinational companies


Bärsch, Sven-Eric ; Heckemeyer, Jost H. ; Olbert, Marcel



DOI: https://doi.org/10.2139/ssrn.3271267
URL: https://papers.ssrn.com/sol3/papers.cfm?abstract_i...
Additional URL: https://www.researchgate.net/publication/329055189...
Document Type: Working paper
Year of publication: 2018
The title of a journal, publication series: SSRN Working Paper Series
Place of publication: Rochester, NY
Publication language: English
Institution: Business School > ABWL u. Betriebswirtschaftliche Steuerlehre II (Spengel)
Subject: 650 Management
Classification: JEL: D20, D74, D81, H25,
Keywords (English): transfer pricing , decision-making , coordination , tax risk
Abstract: The allocation of decision rights is a fundamental issue of organizational design. We study the decision-making authority and respective outcomes within firms’ transfer pricing function where tax and managerial objectives typically conflict. Exploring unique survey data on transfer pricing systems of multinational companies, we investigate the extent to which the centralization of decision-making authority at the tax department is associated with (external) tax audit conflicts and (internal) coordination conflicts. We find that disputes with local tax authorities are more likely, i.e. tax risk is higher, when the tax department has ultimate authority over transfer pricing decisions. This result is consistent with theory predicting that central tax managers focus on firm-wide objectives instead of easing local tax audits. Internal coordination, however, seems to be unaffected by the allocation of decision rights to the tax department.

Dieser Eintrag ist Teil der Universitätsbibliographie.




+ Citation Example and Export

Bärsch, Sven-Eric ; Heckemeyer, Jost H. ; Olbert, Marcel ORCID: 0000-0001-8689-9843 (2018) Transfer pricing and the decision-making authority of the tax function in multinational companies. SSRN Working Paper Series Rochester, NY [Working paper]


+ Search Authors in

+ Page Views

Hits per month over past year

Detailed information



You have found an error? Please let us know about your desired correction here: E-Mail


Actions (login required)

Show item Show item