Abstract
Conceptualizing the effects of corporate tax rate differentials on transfer pricing activities of FDI enterprises in Vietnam
Highlights
In a global economy, transfer pricing has been long an issue of a particular intention of the governments and economists, investors or CEO, according to Akpojevwa (2014), Agarwal (2016), Hung (2017), Nguyen et al (2019) and Nguyen et al (2020)
Corporate tax rate differentials are found to have a strong relationship with transfer pricing activities of foreign direct investment enterprises
To partly contribute to a better understanding of transfer pricing (TP), the research aims to identify the relationship between corporate tax rate differentials and TP activities of foreign direct investment (FDI) enterprises in Vietnam
Summary
Transfer pricing has been long an issue of a particular intention of the governments and economists, investors or CEO, according to Akpojevwa (2014), Agarwal (2016), Hung (2017), Nguyen et al (2019) and Nguyen et al (2020). According to the statistic of Vietnam Ministry of Planning and Investment (2018), by the end of 2018, Vietnam has attracted more than 27,300 FDI projects with the total registered capital of approximately 340 billion US dollars With their business, manufacturing and trading, politicians, economists, and bankers considered FDI as a source of growth that brings about finance, expertise, knowhow, technology transfer, and the markets. FDI capital and resources flow can quickly go from this country to others, and TP abuse develops in different types and methods This situation can make the tax officials hard to evaluate the real business situation of the companies, whether the loss is real or they make profits but reporting of loss. The study on the impact of corporate tax rate differentials on TP activities in FDI enterprises can be the base for other researches in approaching TP and TP abuse, under the context of complex TP activities of multinational corporations in this open economy
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