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Contemporary transnational corporations and their tax profile under transfer pricing

Vol. 22, Iss. 9, SEPTEMBER 2019

Received: 16 July 2019

Received in revised form: 6 August 2019

Accepted: 27 August 2019

Available online: 16 September 2019

Subject Heading: Tax and taxation

JEL Classification: F38

Pages: 993–1007

https://doi.org/10.24891/ia.22.9.993

Velikorossov V.V. Plekhanov Russian University of Economics (PRUE), Moscow, Russian Federation
corp.innovation@rea.ru

https://orcid.org/0000-0001-5845-4820

Chaikovskaya L.A. Plekhanov Russian University of Economics (PRUE), Moscow, Russian Federation
Chaik4@yandex.ru

https://orcid.org/0000-0002-1292-402X

Filin S.A. Plekhanov Russian University of Economics (PRUE), Moscow, Russian Federation
Filin.SA@rea.ru

https://orcid.org/0000-0002-6054-6510

Subject The article reviews the effective governmental regulation of charging taxes on transnational corporations so as to ensure the fair distribution of the tax base and taxes among national budgets.
Objectives The research devises the technique to assess how much transnational corporations contribute to revenue of various jurisdictions. The article also formulates recommendations for improving their international taxation in terms of innovative economy.
Methods The research employs methods of analysis, synthesis and logic study based on the creative and information approach. Relying on the analysis of methods national fiscal systems use to tax transnational corporations, the article proposes the technique to assess how much transnational corporations contribute to fiscal revenue of various jurisdictions in terms of innovative economy.
Results We review how the government regulates the taxation of transnational corporations in innovative economies, demonstrate advantages of deploying the production and profit centers in countries with different taxation. The article presents our technique to assess how certain production factors of transnational corporations contribute to fiscal revenue of various jurisdictions. We also offer our recommendations for improving the international taxation of transnational corporations.
Conclusions and Relevance The proposed technique ensures the fair distribution of taxes and tax base among national budgets. It cam be used as part of local tax regulations with respect to consolidated groups of tax residents.

Keywords: transfer price, transnational corporations, taxation, separate accounting, proportional separation

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