Transfer Prices and Import and Export Price Indexes: Theory and Practice (original) (raw)

2000, SSRN Electronic Journal

Currently over one-third of U.S. trade in goods takes place between related parties. The valuation of these goods has been subject to much controversy and criticism over the years, as companies have been accused of over or under valuing these goods in order to minimize business taxes and/or import duties. A myriad of rules and regulations developed (in the case of the United States) by both the Internal Revenue Service as well as the Customs Service deal with these valuations. For the purpose of calculating the 2 export and import price indexes, however, the question we attempt to answer is, "Conceptually, what is the ideal import/export price the Bureau of Labor Statistics should be collecting in those instances where a transaction is between related parties." We demonstrate that the ideal price for incorporation into these price indexes may be very difficult to calculate, and that the selection of an alternative arms length transaction may be a more fruitful approach.

Sign up for access to the world's latest research.

checkGet notified about relevant papers

checkSave papers to use in your research

checkJoin the discussion with peers

checkTrack your impact