(1) Title
Global Tax Management by U.S. Subsidiaries of Foreign Parent Corporations
(2) Objectives
            International business operations have been growing rapidly in recent decades. The Bureau of Economic Analysis has estimated that sales by U.S. parent companies increased 8.7 percent in 2005 to $7.6 trillion, following a 6.9 percent increase in 2004. Sales by majority-owned foreign affiliates of U.S. parent corporations increased 14.4 percent in 2005 to $3.7 trillion, following a 14.8-percent increase in the prior year. Sales by majority-owned U.S. affiliates of foreign multinational corporations increased 8.8 percent in 2005, following an increase of 8.6 percent in 2004.
            Statistics show that U.S. corporations are less profitable if they are foreign controlled. This is consistent with the observation that a U.S. subsidiary has an incentive to push its profits to its foreign parent corporation, or a foreign subsidiary if its parent corporation, assuming the foreign corporation is in a country that has lower income tax rates. Profits can be pushed to another country by managing transfer prices for purchases (and sales) of goods and services from (or to) a foreign affiliated corporation. This can also be done by paying high interest rates on loans from a foreign parent or other affiliate.
            This paper analyzes the impact of global transfer pricing policies on the U.S. Tax liability of Foreign Controlled Domestic Corporations.
 (3) Data/ Methods;

 Using IRS Statistics of income for these corporations for 2004 compared to the same statistics for 2000. With this comparison, we seek to identify trends in transfer pricing policies over this four-year period.

 (4) Results/Expected Results

 Data is still being collected. We seek to identify trends in transfer pricing policies over this four-year period.