Transfer pricing becomes especially complex when the global market is involved because:
A)shipping materials across national lines involves payment of duties and taxes, and these become part of the total price of the goods.
B)issues of quality control can be serious, even when divisions of the same firm are involved.
C)a firm with activities in several countries can use transfer pricing as a tax-avoidance device and governments frown upon such activities.
D)the temperature and humidity differences between origins and destinations often damage the products.

Question

Quizplus · Accepted Answer

Transfer pricing can be used by firms with activities in several countries as a tax-avoidance device, which can lead to scrutiny and disapproval from governments. This complexity is magnified when the global market is involved, as it may involve multiple tax jurisdictions, varying regulations, and currency exchange considerations. The other options listed are not directly related to the complexities of transfer pricing in the global market.

Transfer Pricing Becomes Especially Complex When the Global Market Is