The OECD is concerned about transfer pricing practices because ________.
A)transfer pricing can help maximize a company's worldwide tax liability
B)transfer prices tend to be higher in industrial than developing countries
C)governments use transfer prices to manipulate companies' investment strategies
D)companies use transfer prices to manipulate prices and, therefore, taxes

Question

Quizplus · Accepted Answer

Transfer pricing allows companies to manipulate the price of goods and services exchanged between related entities in different tax jurisdictions, leading to the potential manipulation of taxes paid. The OECD is concerned about this practice because it can lead to a loss of tax revenue for governments and an uneven playing field for businesses.

The OECD Is Concerned About Transfer Pricing Practices Because ________