lnternational transfer pricing strategies for minimizing global income taxes

Abstract

RESUMO: A sobrevivência a longo prazo de estratégias financeiras ótimas, em mercados internacionais competitivos, é crítica. Estratégias financeiras concernentes a preços de transferência se tornam cada vez mais importantes à medida que os fiscais de impostos de rendas procuram receitas adicionais através de um controle crescente das práticas empresariais. Neste artigo, as estratégias ótimas de impostos são apresentadas depois de serem revisados o conceito de preços de transferência e as suas bases lógicas subjacentes ao crescente interesse dos governos. Num próximo artigo, nós analisaremos os efeitos das restrições governamentais nas estratégias de preços ótimos. and revenue needs has motivated significant changes in how Brazilian income tax authorities view multinational transactions. These changes signal Brazil's emergence as a global economy and they have substantial implications for how business is conducted by Brazilian multinationals and foreign enterprises with Brazilian interests. A fundamental implication pertains to transfer pricing among multinational affiliates. In this two artic1estudy we address tax minimizing corporate transfer pricing strategies (this artic1e) and the effect of govemment restrictions on these strategies (forthcoming artic1e). ABSTRACTMore specifically,in this first artic1e, the concept of transfer pricing is presented inc1uding its historical background and conceptual features. Then, the extent of and reasons for govemments' preoccupation with transfer pricing are explored. With this orientation, the next section addresses the artic1e's main focus which is an analysis of optimal company strategies for minimizing income taxes using transfer pricing. We conc1ude by observing that company incentives to manipulate transfer prices have prompted govemments to institute or consider rules that restrict companies' transfer pricing strategies.