The regulation of international transfer pricing: a theological critique

This paper presents an overtly theological critique of the governmental regulation of the international transfer pricing activities of multi-national enterprises. In the transfer-pricing arena, it is known that MNEs transfer substantial values across national borders. The Organisation for Economic Cooperation and Development developed a set of Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (1995) as the basis for regulating transfer pricing. The underlying appeal in the Guidelines is to (rationality in) economic decision making. However, we argue that this appeal to economic rationality is problematic and use Papal Encyclicals on social justice to provide a critique of the regulation of international transfer pricing. Hence, this paper seeks to apply theological insights to an apparently more secular and material problem. The regulation of international transfer pricing: a theological critique.