Governments often examine transfer prices carefully as they are often aimed at supporting parallel imports.

Question

Quizplus · Accepted Answer

Transfer prices are usually examined by governments to ensure that there is no tax evasion or profit shifting within a multinational company by artificially inflating or deflating prices of goods and services being transferred between its subsidiaries. They are not usually aimed at supporting parallel imports, which refer to the importation of genuine products from one market to another without the permission of the manufacturer or authorized distributor in the destination market.

Governments Often Examine Transfer Prices Carefully as They Are Often