Published in:Düsseldorf Working Papers in Applied Management and Economics, 47, (2018)
Extent:
1 Online-Ressource (27 p)
Language:
English
DOI:
10.2139/ssrn.3303530
Identifier:
Origination:
Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments December 18, 2018 erstellt
Description:
The “fair” taxation of digital business models is challenging. One of the key aspects — both policy makers and the public opinion consider as most pressuring — is the determination of intragroup transfer prices for intangibles used in digital business models. In this paper, we address the issue of a “perceived fair” taxation of the digital economy in the light of the arm's length principle based on a survey with transfer pricing experts. The aim of the survey is not to estimate arm's length profit allocations but rather to elicit fairness considerations in different transfer pricing related scenarios.In a digital economy framework where arm's length profits are distributed extremely inequitably, subjects perceive this distribution of profits as most unfair compared to more balanced scenarios. Consequently, subjects propose a “fair” distribution of profits that substantially differs from the exogenously given arm's length allocation. In scenarios with a more balanced arm's length allocation of profits, we find that the perceived fairness for the expert groups increases while a control group of business students is almost not influenced by the arm's length allocation of profits