Importance Of The Transfer Pricing In Multinational Enterprises

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Arslan S.

in: Economic and Business Issues in Retrospect and Prospect, Marcel Meciar,Kerem Gökten,Ahmet Arif Eren, Editor, IJOPEC Publication , London, pp.381-394, 2019

  • Publication Type: Book Chapter / Chapter Research Book
  • Publication Date: 2019
  • Publisher: IJOPEC Publication
  • City: London
  • Page Numbers: pp.381-394
  • Editors: Marcel Meciar,Kerem Gökten,Ahmet Arif Eren, Editor
  • Kayseri University Affiliated: No


As of today, many countries are making arrangements to attract foreign investments in order to achieve successive economic policies. Due to such regulations, both national and international competition has increased. The ability to invest in different countries has led to an increase in the number of multinational enterprises as well as the growth of these enterprises. It is stated that multinational enterprises have approximately 60% of the world’s trade volume and about 50% of the trade volume is realized with related parties or institutions. In these circumstances in which excessive competition occurs; It has been determined that multinational enterprises gain an advantage by incurring less tax by transfer pricing in order to maintain their competitive power and to succeed in cost management for gaining higher profits (Kaymaz et al., 2008: 42). Upon considering the position of multinational enterprises in global markets; research studies, analyses and regulations pertaining to the issue have been conducted in many countries. Because the distribution of disguised revenue through transfer pricing in order to increase the profitability of multinational enterprises also threatens the national tax systems of countries.