Unpacking Transfer Pricing: It’s Impact on Digital Services Taxation Regimes in North America

Abstract

This paper explores the intricate relationship between transfer pricing and digital services taxation regimes in North America. Transfer pricing, the pricing of intercompany transactions, plays a pivotal role in how multinational corporations (MNCs) allocate profits and costs across jurisdictions. With the rapid growth of digital services, tax authorities face challenges in effectively taxing these entities. This study examines the implications of existing transfer pricing regulations on digital services taxation and the evolving frameworks in North America. By analyzing case studies and current practices, the research aims to provide insights into how transfer pricing affects revenue collection, compliance burdens, and tax planning strategies for both MNCs and tax administrations.