United States' multinational companies must use a transfer price that one division would pay another if they were independent companies.

Question

Quizplus · Accepted Answer

This statement is true. Transfer pricing is used by multinational companies to determine the price at which goods, services, or intellectual property are transferred between different divisions or subsidiaries within the same company. The transfer price should be based on what the price would be if the divisions were independent companies dealing at arm's length. This is important for tax purposes and to ensure fair competition within the company.

United States' Multinational Companies Must Use a Transfer Price That