Tax-motivated transfer mispricing in South Africa: Direct evidence using transaction data

Research output: Working paperResearch


  • Ludvig Wier
This paper provides the first direct systematic evidence of profit shifting through transfer mispricing in a developing country. Using South African transaction-level customs data, I directly test for transfer price deviations from arm’s-length pricing. I find that multinational firms in South Africa manipulate transfer prices in order to shift taxable profits to low-tax countries. The estimated tax loss is 0.5 per cent of corporate tax payments. My estimates do not support the common belief that transfer mispricing in South Africa is more severe than in advanced economies. I find that an OECD-recommended reform had no long-term impact on transfer mispricing but argue that the method used in this paper provides a cost-efficient way to curb transfer mispricing.
Original languageEnglish
Place of PublicationHelsinki, Finland
Number of pages36
ISBN (Print)978-92-9256-050-8
ISBN (Electronic)978-92-9256-053-9
Publication statusPublished - 2018
SeriesUNU WIDER Working Paper Series

    Research areas

  • Faculty of Social Sciences - tax, international taxation, profit shifting, multinational firms, developing countries

Number of downloads are based on statistics from Google Scholar and

No data available

ID: 212425792