Abstract:

This research aims to investigate the impact of GAAR used by high tax rate countries on transfer pricing practices with related parties in Asian developing countries. This research employs panel data for a sample of 200 subsidiaries in 8 countries throughout 2010-2014. This study partially evidence that GAAR applied by high tax rate country can prevent transfer pricing practices in various types of transactions. This study provides insight into the tax authority that the existence of GAAR can mitigate transfer pricing practices.