TY - BOOK ID - 133422366 TI - Keeping it Simple–Efficiency Costs of Fixed Margin Regimes in Transfer Pricing AU - Beer, Sebastian. AU - Leduc, Sebastien. AU - Loeprick, Jan. PY - 2022 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Macroeconomics KW - Economics: General KW - International Taxation KW - Production and Operations Management KW - Taxation KW - Industries: Manufacturing KW - Taxation, Subsidies, and Revenue: General KW - Production KW - Cost KW - Capital and Total Factor Productivity KW - Capacity KW - Macroeconomics: Production KW - Industry Studies: Manufacturing: General KW - Economic & financial crises & disasters KW - Economics of specific sectors KW - Public finance & taxation KW - Manufacturing industries KW - Transfer pricing KW - Taxes KW - Total factor productivity KW - Productivity KW - Tax wedge KW - Tax policy KW - Manufacturing KW - Economic sectors KW - Currency crises KW - Informal sector KW - Economics KW - Industrial productivity KW - Tax administration and procedure KW - Mexico UR - https://www.unicat.be/uniCat?func=search&query=sysid:133422366 AB - Simplifying tax policy comes with costs and benefits. This paper explores simplification options for the taxation of MNEs, an area where administrative and compliance costs of the current rules are large. Simplified approaches seek to reduce these costs by relying on an approximation of the true tax base, potentially distorting resource allocation. We examine the efficiency cost of transfer pricing simplification theoretically and empirically. Using a sample of 300,000 firms located in 22 countries, we estimate that common transfer pricing practices reduce efficiency between 0.25 and 2.2 percent of total factor productivity across sectors. Focusing on the manufacturing sector, we then observe that simplification more than doubles sectoral inefficiency on average. However, large differences exist, with moderate efficiency costs in several sectors. ER -