Abstract:

This research aims to investigate the impact of Worldwide system used by parent country on transfer pricing practices by subsidiaries in Asian developing countries. This research employs panel data for a sample of 200 subsidiaries in 8 countries over a period of 2010-2014. This study finds that Worldwide system applied by parent country can prevent transfer pricing practices in various type of transactions. This study provides insight for the tax authority that Worldwide system is the tax system that can mitigate the transfer pricing practices.