Evaluating Transfer Pricing Regimes in East Asia
East Asian countries are rapidly increasing their transfer pricing activities.
Aggregate size (aggregate gross domestic product / income) is a very strong indicator of a country’s involment in transfer pricing. All of the ten largest countries in East Asia have transfer pricing regimes, as do the ten largest countries in the Americas.
Gross domestic product per capita, provides uncertain to negative results from the standpoint of implementing transfer pricing. Brunei, Macao, Seychelles in East Asia have shown little, if any, desire to emplement transfer pricing regimes.
Change in domestic per capita income, provides uncertain to negative results from the standpoint of implementing transfer pricing. Bhutan, Timor-Leste, and Macao in East Asia have shown no desire to implement transfer pricing regimes.
It is our conclusion that the primary determinant for ascertaining a country’s involment in transfer pricing is aggregate size (aggregate gross domestic product / income). As a different issue, note that the GDP growth rates in East Asia are much higher than those in the Americas.