Emmanuel Saez on Transfer Pricing - Dictionary of Arguments
Saez I 112
Transfer Pricing/Saez/Zucman: The transfer pricing industry lives by the system of corporate taxation created in the 1920s; it has a vital stake in preserving it. For example, if companies, instead of being taxed subsidiary by subsidiary, were taxed as consolidated entities, there would be no point in computing the prices of transactions between subsidiaries. The transfer pricing industry would become obsolete overnight. The stakes are huge: today, 250,000 people work as transfer pricing professionals in private firms, either in the Big Four or as direct employees of multinationals.(1)
Saez I 113
The tax-dodging industry also has a vested interest in ensuring as little international coordination as possible. If all countries had the same tax rate, after all, firms would not care about shifting profits from one place to the other; there would be no point in moving patents across subsidiaries; no reason to borrow money from affiliates in Luxembourg.
1. Available estimates suggest that the compensation of transfer pricing professionals globally has been about $20 billion a year in recent years; see Tørsløv, Thomas, Ludvig Wier, and Gabriel Zucman. “The Missing Profits of Nations.” National Bureau of Economic Research Working Paper no. 24701, 2018._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Author1]Vs[Author2] or [Author]Vs[term] is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition.