Tax considerations should play no part in determining a transfer price between international divisions of a firm.

Question

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Tax considerations should be taken into account when determining a transfer price between international divisions of a firm, as different tax laws in different countries can significantly affect the overall profitability of the company. Ignoring tax considerations could result in the company paying too much or too little tax, which would ultimately impact the company's bottom line.

Tax Considerations Should Play No Part in Determining a Transfer