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Asia and Pacific > India

You are looking at 1 - 2 of 2 items for :

  • Type: Journal Issue x
  • International Taxation x
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Cover IMF Working Papers
Keeping it Simple–Efficiency Costs of Fixed Margin Regimes in Transfer Pricing
Sebastian Beer
,
Sebastien Leduc
, and
Jan Loeprick
Simplifying tax policy comes with costs and benefits. This paper explores simplification options for the taxation of MNEs, an area where administrative and compliance costs of the current rules are large. Simplified approaches seek to reduce these costs by relying on an approximation of the true tax base, potentially distorting resource allocation. We examine the efficiency cost of transfer pricing simplification theoretically and empirically. Using a sample of 300,000 firms located in 22 countries, we estimate that common transfer pricing practices reduce efficiency between 0.25 and 2.2 percent of total factor productivity across sectors. Focusing on the manufacturing sector, we then observe that simplification more than doubles sectoral inefficiency on average. However, large differences exist, with moderate efficiency costs in several sectors.
Keywords:
Taxation of Multinational Enterprises; Transfer Pricing Simplification; Efficiency Costs; modelling transfer pricing Benchmarking; efficiency cost; annex I. descriptive statistics; simplification option; transfer pricing practice; efficiency loss; Transfer pricing; Total factor productivity; Productivity; Tax wedge; Manufacturing; Global
Cover Staff Climate Notes
Carbon Pricing: What Role for Border Carbon Adjustments?
Ian W.H. Parry
,
Mr. Peter Dohlman
,
Mr. Cory Hillier
,
Mr. Martin D Kaufman
,
Florian Misch
,
Mr. James Roaf
,
Mr. Christophe J Waerzeggers
, and
Miss Kyung Kwak
This Climate Note discusses the rationale, design, and impacts of border carbon adjustments (BCAs), charges on embodied carbon in imports potentially matched by rebates for embodied carbon in exports. Large disparities in carbon pricing between countries is raising concerns about competitiveness and emissions leakage, and BCAs are a potentially effective instrument for addressing such concerns. Design details are critical, however. For example, limiting coverage of the BCA to energy-intensive, trade-exposed industries facilitates administration, and initially benchmarking BCAs on domestic emissions intensities would help ease the transition for emissions-intensive trading partners. It is also important to consider how to apply BCAs across countries with different approaches to emissions mitigation. BCAs are challenging because they pose legal risks and may be at odds with the differentiated responsibilities of developing countries. Furthermore, BCAs provide only modest incentives for other large emitting countries to scale carbon pricing—an international carbon price floor would be far more effective in this regard.
Keywords:
Border carbon adjustment, climate mitigation, carbon pricing, competitiveness, emissions leakage, allowance allocation, design issues, World Trade Organization rules; IMF staff climate note; border carbon adjustments; climate mitigation; emissions leakage; BCA to energy-intensive; Greenhouse gas emissions; Climate change; Imports; Export subsidies; Global