Institutional gaps in global transfer pricing: A systematic review on fiscal sustainability and SDG-based tax justice for developing economies

Abstract

Transfer pricing practices by multinational enterprises (MNEs) pose significant challenges to establishing a fair, transparent, and sustainable global tax system. Developing countries are most affected, as aggressive tax avoidance erodes their revenues and undermines fiscal sustainability. This study aims to analyze institutional gaps in the implementation of transfer pricing policies between developed and developing countries and assess their implications for fiscal sustainability and tax justice within the framework of the Sustainable Development Goals (SDGs). Employing a Systematic Literature Review (SLR) based on the PRISMA method, the research screened 385 articles from Scopus and Web of Science databases and selected 19 high-quality articles using the PICOC framework and MMAT appraisal tool. The findings indicate that developing countries face persistent challenges, including limited administrative capacity, unequal access to comparable data, external pressures to provide tax incentives, and the structural bias of global tax rules such as BEPS 2.0 toward residence-based taxation. These asymmetries contribute to significant tax base erosion and undermine the ability of developing countries to achieve SDG 16 (peace, justice, and strong institutions) and SDG 17 (partnerships for the goals). The practical implications suggest the urgency of inclusive global tax governance reform, institutional capacity-building in developing countries, and equitable access to global transfer pricing databases. This study contributes to the ongoing discourse on fair international tax policy and provides an evidence-based foundation for designing sustainable and context-sensitive fiscal strategies aligned with long-term development goals.