The Impact of Location Advantages on the Transfer Pricing of Multinationals: On the Chinese Love for European Designer Handbags and Lower Production Costs in India

The authors discuss the impact of location advantages on the transfer pricing of multinationals. Specific guidance from the OECD and United Nations on location advantages is considered, followed by a discussion of two international tax cases. The current practice on location advantages and transfer pricing in the Netherlands and in China, as examples, is also examined.