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Transfer (mis)pricing, the jewel in every multinational enterprise’s crown

How developing countries lose $3 billion every day through an accounting trick that allows corporations to avoid paying tax.

By Tanya Rawal-Jindia
Transfer (mis)pricing, the jewel in every multinational enterprise’s crown
Image: Kurtis Garbutt, CC by 2.0
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This article is part of ourEconomy's 'Decolonising the economy' series.

Amazon.com Inc. was brought to court by the U.S. Internal Revenue Service (IRS) in 2017 for transfer pricing discrepancies. In 2005 and 2006, the multinational tech company had transferred $255 million in royalty payments to its tax haven in Luxembourg, but according to the IRS these royalty payments should have amounted to $3.5 billion. This transfer pricing adjustment would have increased Amazon’s federal tax payments by more than $1 billion.

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Creative Commons Attribution-NonCommercial 4.0