Transfer Pricing in the Context of Global Supply Chains: Implications for Tax Revenue in Developing Countries

Abstract

This paper explores the intricate dynamics of transfer pricing within global supply chains and its impact on tax revenue in developing countries. Transfer pricing, the practice of setting prices for transactions between affiliated entities within a multinational corporation, has significant implications for tax revenues, particularly in developing economies. This study examines how transfer pricing practices can lead to tax base erosion and profit shifting (BEPS), discusses the challenges developing countries face in implementing effective transfer pricing regulations, and proposes strategies to enhance tax revenue through improved transfer pricing policies and international cooperation.