The practice of billing costs from an entity in a higher tax regime to an entity in a lower tax regime is called:
A) transfer pricing
B) arbitrage
C) tax evasion
D) none of these

Question

Quizplus · Accepted Answer

The practice described is known as transfer pricing. This involves setting prices for goods or services sold between different entities within a company, which can be used to shift profits from high-tax jurisdictions to low-tax ones, thereby reducing the overall tax burden of the company.

The Practice of Billing Costs from an Entity in a Higher