Julien Martin

Thematic seminars
Development and political economy seminar

Julien Martin

University of Québec
Knocking on tax haven’s door: Multinational firms and transfer pricing
Joint with
Ronald B. Davies, Mathieu Parenti, Farid Toubal

Château Lafarge

Château Lafarge - Salle de séminaires
Château Lafarge
Route des Milles
13290 Les Milles
Friday, March 18 2016| 12:00pm to 1:15pm

Alice Fabre: alice.fabre[at]univ-amu.fr


This paper analyzes the transfer pricing of multinational firms. Intra-firm prices may systematically deviate from arm’s length prices for two motives: pricing to market and tax avoidance. Using French firm-level data on arm’s length and intra-firm export prices, we find that the sensitivity of intra-firm prices to foreign taxes is reinforced once we control for pricing-to-market determinants. Most importantly, we find no evidence of tax avoidance if we disregard tax haven destinations. Tax avoidance through transfer pricing is economically sizable. The bulk of this loss is driven by the exports of 450 firms to ten tax havens.