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Transfer pricing intensity and its determinants before and during COVID-19: evidence from Indian MNCs

Published Online:pp 267-284

This paper examines the various sources of transfer pricing intensity, pursued by multinational corporations to shift their taxable income from high-tax countries to low-tax countries to facilitate tax avoidance. The study analyses the impact of the effective tax rate (ETR), firm size, leverage, profitability, and intangible assets on transfer pricing. Also, we explored the asymmetric impact of ETRs on transfer pricing. The sample for the study contains 49 MNCs of India bifurcated into the manufacturing and services industry for the period 2017 to 2021. Utilising the feasible generalised least squares (FGLS) the study confirmed the mixed impact of variables in the manufacturing and services industry; however, for the combined sample the study found all the variables positively related to transfer pricing aggressiveness. For the asymmetric impact we found inverted-U type of relationship between ETRs and transfer pricing intensity also the reducing effects of variables during COVID-19 period were observed.


transfer pricing aggressiveness, multinational enterprises, MNEs, firm size, leverage, effective taxes, intangibility