TRANSFER PRICING, ACCRUALS EARNINGS MANAGEMENT AND CORPORATE TAX AVOIDANCE OF LISTED MULTINATIONAL CORPORATIONS IN NIGERIA
Keywords:
Accruals Earnings Management, Effective Tax Rates, Foreign Direct Investment, Corporate Tax Avoidance, Multinational Corporations, Transfer pricingAbstract
The study envisages to ascertain the effect of the interaction of transfer pricing and accruals earnings management on corporate tax avoidance of Multinational Corporations (MNCs) in Nigeria. The specific objectives of the study are to ascertain the sensitivity of book-tax differences and effective tax rates to the interaction of discretionary accruals and the transfer price index of multinational firms. The study adopts the ex post facto research design. The sample was restricted to 50 Multinational Corporations (MNCs) selected using the purposive sampling technique. The data were analysed using the panel Estimated Generalized Least Squares (EGLS)technique, specifically the period random effects specification models. The results showed that the interaction of discretionary accruals and transfer price index negatively affect book-tax differences and effective tax rates. The study concludes thataccruals earnings management and transfer pricingare signifincant determinants of corporate tax avoidance of MNCs in developing ciountires. Based on this, the study recommends that the Government reviews its tax policies to attract more inwards Foreign Direct Investment (FDI) and the Boards of MNCs should be wary of transfer price manipulation as these may be suggestive of managerial opportunistic behaviour for self-seeking actions. Lastly, a critical assessment of the host country peculiarities should be considered by local tax authorities in drafting local regulations..
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2021 JOGA
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Articles submitted to JOGA should not have been published or are currently under review by another Journal. Kindly see the guide for the preparation of the manuscript for details. Successful submission of articles by author(s) for publication clearly implies that the work is not an infringement of any existing copyright warranty as JOGA reserves the right to be indemnified by the author(s) where any breach of such warranty is proven. For ease of dissemination and to ensure proper policing of use, papers and contributions become the legal copyright of JOGA once published unless otherwise agreed.
Permission clearance should be obtained by the author(s) where applicable for the use of any content of interest not originally created by them. This must be done before the submission of the article to JOGA. Failure to do so may lead to a lengthy delay in publication, as JOGA is unable to publish any article which has permissions pending. Thus, the rights JOGA requires are:
- Non-exclusive right to reproduce the material in the article or book chapters.
- Print and electronic rights.
- To use the material for the life of the work (for instance, there should be no time restrictions on the re-use of material).
Where tables, figures or excerpts of more than 250 words are reproduced from another source, it is expected that:
- Author(s) should obtain the necessary written permission in advance from any third-party owner of the copyright for the use in print and electronic formats of any of their text, illustrations, graphics, or other material in their manuscript. Permission must also be cleared for any minor adaptations of any work not originally created by the author(s). The author (s) should not assume that any content freely available on the web is free to use.
- Where the author adapts a significant number of any material, the author(s) must inform the copyright holder of the original work.
- Author obtains any proof of consent statements
- The author must acknowledge figure(s) and content adopted or adapted in work utilizing source(s) and further capture them in the list of references.
