MNEs should engage in transfer pricing policies that modify the tax bases on which their entities are assessed.

Question

Quizplus · Accepted Answer

Transfer pricing policies should be used to allocate income and expenses between related entities in a manner that reflects the economic reality of their transactions, not to artificially modify tax bases to reduce overall tax liabilities. Such practices can lead to legal penalties and reputational damage.

MNEs Should Engage in Transfer Pricing Policies That Modify the Tax