International taxation and intrafirm pricing in transnational corporate groups

Article Abstract:

Issues in international taxation, especially within transnational corporate (TNC) groups is examined both theoretically and empirically, from the points of view of the firm and of state authorities. Regulation of the manipulation of transfer prices within alliances has been based on an 'arms length' criterion in order to avoid double taxation. However, this criterion is useless on a market price basis because cost and profit allocation within TNCs has political underpinings: firm strategy and state control over oligopolies and allocation of integration benefits. While unitary taxation is accepted in the US, Organization for Economic Cooperation and Development countries have yet to legitimize criteria and procedures for tax administration and cooperation, especially for unitary or consolidated taxation. At present, most nations practice bargained profit division and fixed cost formula allocation.

Taxation, International aspects, International business enterprises, Multinational corporations, Corporate income taxes

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Spotting profits and problems with ROA

Article Abstract:

Return on Assets (ROA) measures industrial performance by measuring how effectively assets are used to produce income and revenue. It can be used for external industrial comparisons or as a relative measure of unit effectiveness. ROA is calculated by dividing net income by total assets. Even though net income after taxes is the most frequent income measure used in calculating ROA, managers will find they get a better sense of individual divisional effectiveness by using operating profit income measures. Managers need to analyze each component of ROA carefully to determine if the alterations in ROA are affected by financial reporting techniques or by actual operational changes.

Decision-making, Decision making, Return on investment, Rate of return

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Towards an organizational theory of the transfer pricing process

Article Abstract:

Transfer pricing in large, decentralized firms presents problems in the design of managerial accounting systems. The strategic, organizational and transactional conditions of transfer pricing and the processes of intra-company transfer of products determine transfer pricing policies and mechanisms. Evidence for this conclusion is supported by previous investigations in the chemicals, electronics, and heavy machinery industries.

Prices and rates, Accounting and auditing, Transfer pricing

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