32 SOCIAL SC1ENHST PA ;=3 R—C+Y (l—t) where t is the corpoiate tax rate, PB =3 (1-t) (R-C+Y) PA ^K-C-Y-t(Y) ^1) PB^ R—C+.Y—t(R<-G+Y, (^ Since R- C <; 0 t (R-C+Y) 9 PA and Pg in this case would he PA ^ R-C+Y-t2 (Y) (3) PBS R—C+Y—ti (R—C+Y} (4) if R—C s 0 % t2 (Y) t^ and PA> PB ifR—c^> 0 then this conclusion would only be reinforced. But since R—C <^ 0, as long as transfer pricing is pursued upto the point where Y covers the difference between R and C, the liability would be zero (i c, P]^ would be zero), but an equivalent transfer through dividend remittances would always imply a tax liability and losses (i e, PA would always be negative) greater than what the transfer pricing ca^e would imply. 10 For a survey of the extent of credit offered in most of the important home countries of the TNCs for taxes paid abroad, see Kopits (1976), op dt, p 634. 11 See UNGTAD, Dominant Positions of Market Power a/Transnational Corporations—Use of the Transfer Pricing Mechanism^ New York, 1978. 12 The TNC simultaneously determines the magnitude and nature of internal flows with external forms of borrowing. Sec Kopits (1976), op cit, p 643 13 See Sajaya Lall» "Transfer Pricing and LDCs: Some Problems of Investigation", in The Multinational Corporation: Nine Essays, reprinted from World Development, Vol 7, No 1, 1979, pp 59-71.