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Transfer pricing abuse is a massive global problem, argue RICHARD MURPHY, ALEX COBHAM and RAYMOND BAKER
KEY POINTS
- Illegal flows out of developing countries could be up to $1 trillion annually.
- Estimates of lost annual tax revenue fall in the range of $100 billion to $160 billion.
- Profits are shifted to tax havens.
- Country-by-country reporting will help increase tax yield.
- Increase scope of exchange agreements.
Mike Truman in his comment article Lack of evidence questioned work we have in various and different ways undertaken to estimate the loss arising to developing countries from transfer pricing abuse – or transfer mispricing as we prefer to call it.
We think Mike is saying three things. The first is that Raymond Baker’s work on this issue published in his 2005 book Capitalism’s Achilles Heel used an inappropriate interview-based methodology to establish a potential rate of transfer...
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