Glaxo transfer pricing case : economic rationale, legal framework and international issues

This article analyses the GlaxoSmithKline case, the largest tax dispute ever litigated in the world, from an economic perspective and discusses the impact of the decision on audits of taxpayers' transfer pricing policy. The authors consider not only transfer pricing, but also other contractual provisions affecting the determination of whether Glaxo affiliates were entering into transactions on an arm's length basis.