Navigating transfer pricing complexity: standardisation, cooperation, and transparency

Abstract

This study examines the drivers of perceived corporate transfer pricing complexity. Our analysis is based on survey data from multinational firms in the manufacturing sector. We identify three key strategies expected to reduce transfer pricing complexity and associated compliance costs while enhancing tax compliance: standardising transfer pricing documentation, strengthening cooperation between tax authorities, and increasing transparency through expanded information exchange among tax authorities and between tax authorities and firms. The findings provide evidence-based insights for international tax policy aimed at reducing transfer pricing complexity and associated administrative burdens for both firms and tax administrations.