ENVIRONMENTAL VARIABLES OF MULTINATIONAL TRANSFER PRICING: A U.K. PERSPECTIVE

Abstract

This paper reports the findings from an empirical study of multinational transfer pricing based on the information provided by 47 British multinational companies. The results indicate that company profit after tax was the key consideration for those companies in formulating their international transfer pricing policies. In addition, they also considered other important variables including the competitive position of their foreign subsidiaries, divisional performance evaluation, and foreign restrictions on repatriation of profits. Six dimensions of environment variables of multinational transfer pricing were also extracted using factor analysis technique.