کنترل مدیریت در انتقال مالیات قیمت گذاری مطابق با شرکت های چند ملیتی

This paper studies the impact of transfer pricing tax compliance on management control system (MCS) design and use within one multinational enterprise (MNE) which employed the same transfer prices for tax compliance and internal management purposes. Our analysis shows immediate effects of tax compliance on the design of organising controls with subsequent effects on planning, evaluating and rewarding controls which reveal a more coercive use of the MCS overall. We argue that modifications to the MCS cannot be understood without an appreciation of the MNEs’ fiscal transfer pricing compliance process.

This study addresses the influence of transfer pricing tax compliance on the design and use of management control systems (MCSs) in multinational enterprises (MNEs) using one set of transfer pricing books. The domestic management accounting and control literature stresses the role of transfer prices as MCS instruments that differentiate and integrate the actions of parts of the organisation and impact on performance evaluation (Colbert and Spicer, 1995, Eccles, 1983, Eccles, 1985, Gosh, 2000, Luft and Libby, 1997, Spicer, 1988, Swieringa and Waterhouse, 1982, Van der Meer-Kooistra, 1994 and Watson and Baumler, 1975). Cross-border transfer pricing in MNEs1 have traditionally received a place in other streams of the literature. Tax law studies discuss national tax regimes, tax compliance requirements, and the optimal transfer pricing method from a fiscal point of view (Douvier, 2005, Kroppen and Eigelshoven, 1998, Levey et al., 2001, Swenson, 2001 and Van Mens and Porquet, 2001). Tax accounting studies investigate the degree to which national tax rate differentials lead to transfer pricing manipulation and income shifting (Grubert and Mutti, 1991, Gupta and Mills, 2002, Halpirin and Srinidhi, 1987, Halpirin and Srinidhi, 1991, Harris, 1993, Harris et al., 1982, Jacob, 1996, Jensen, 1986 and Klassen et al., 1993). The contingency literature provides an alternative perspective by identifying the objectives of a company’s (international) transfer pricing policy and the organisational and environmental determinants – such as the tax regulations – of its transfer pricing method (Borkowski, 1992a, Borkowski, 1992b, Borkowski, 1996, Borkowski, 1997, Cravens and Shearon, 1996, Cravens, 1997, Emmanuel and Mehafdi, 1994 and Tang, 1979). We aim at refining the general statement from the contingency literature that ‘international tax rules affect the choice of the transfer pricing method’ by investigating the potential impact of tax compliance on the design and use of the MCS within MNEs. Tax compliance has recently gained in importance given that fiscal authorities worldwide have strengthened their transfer pricing tax rules. While the extant tax law and tax accounting literatures focus on fiscal optimisation, a number of recent analytic studies calculate the transfer prices that reconcile managerial and tax objectives under certain static circumstances (Baldenius et al., 2004, Halpirin and Srinidhi, 1991, Hyde, 2002, Hyde and Choe, 2005 and Narayanan and Smith, 2000). In contrast, we use a case study to investigate the process over time when searching to answer our central research question: What is the impact of the steps taken to comply with international transfer pricing regulations on the design and use of the MCS in an MNE using one set of transfer prices? The MNE under study chose to adopt tax compliant transfer pricing by using the same set of books for both MCS and tax purposes, an assumption of most analytic articles (Halpirin and Srinidhi, 1991, Sansing, 1999 and Smith, 2002a). Some recent studies (Baldenius et al., 2004, Hyde and Choe, 2005 and Smith, 2002b), however, model two distinct transfer prices, one to serve incentive purposes and the other to serve tax purposes. Still, MNEs commonly use the same set of books, ‘both for simplicity and in order to avoid the possibility that multiple transfer prices become evidence in any disputes with the tax authorities’ (Baldenius et al., 2004, Durst, 2002, Ernst and Young, 2001, Ernst and Young, 2003 and Ernst and Young, 2005). Consultants advise MNEs to implement one set of books to demonstrate to the tax authorities that transfer pricing is justified by internal, rather than purely tax-driven motives (Ernst and Young, 2001 and Ernst and Young, 2003). While the analytic literature regards tax compliance as a fact, the current study on MCS design and use explicitly examines the process of gaining tax compliance: for one successful MNE the redesign of the transfer pricing system to ensure fiscal compliance and its impact on the MCS are investigated over the period 1993–2001. We use Eccles (1985) work to describe the tax compliance process, while Chow, Shields and Wu’s (1999) framework guides the analysis of MCS design, and Adler and Borys (1996) and Ahrens and Chapman’s (2004) concepts of ‘enabling’ versus ‘coercive’ control systems guide the analysis of MCS use. The data are partly historical, based on archival documents and recollections by managers, and partly longitudinal, with one researcher having been present in the case company between 1999 and 2002. We find that our company’s tax compliant transfer pricing policy permeates all levels of the organisation and influences elements of its MCS. Analytic generalisation suggests that tax compliance is an additional contingent variable when seeking to understand MCS design and use in MNEs. Our study therefore contributes to the contingency school of accounting research investigating how the role of management accounting is influenced by environmental factors (Abernethy and Lillis, 1995, Ahrens and Chapman, 2004 and Chenhall, 2003). We also aim at responding to the call for theoretical contributions that explain how transfer pricing processes within the MCS are actually managed (Colbert and Spicer, 1995 and Spicer, 1988) and delve into the deeper internal consequences of transfer pricing in MNEs (Cravens & Shearon, 1996; Cravens, 1997). As a result we can develop a number of propositions that may provide potentially interesting avenues for future research. Given the paucity of evidence on the role of transfer pricing for management purposes in MNEs, the interviews and archival data provide a unique insight. The study is also relevant for policy matters: tax authorities wish to stop tax evasion and manipulation but also to prevent double taxation, while MNEs seek to comply with regulations but also to create shareholder (after tax) value. Within these broad tensions, the consequences of the fiscal ‘arm’s length’ principle for internal decision making, performance evaluation and managerial motivation are largely unknown (Eden, 1998 and Hamaekers, 2001). The remainder of the paper is organised as follows. The next section on the tax regulatory environment outlines the broader context of the study. We then review the organisational behaviour and MCS literatures and describe the research method used and the research site. In the next section we present the results of our dynamic analysis. After sketching out the MNE’s overall corporate strategy for the period 1993–2001, we discuss, for the same period, its emerging tax compliant transfer pricing policy and the way in which changes in the latter have impacted its MCS. This is followed by the development of four propositions on the consequences of tax compliant transfer pricing for the design and use of the MCS. Finally, this paper ends with the discussion of our single case study findings, our overall conclusions and suggestions for future research.