_____________________ can be used to allocate taxable income between different units of an MNC operating in different countries.

Question

Quizplus · Accepted Answer

Transfer pricing is the practice of setting prices for transactions between different units of a multinational corporation (MNC). It is used to allocate taxable income between these units, and it can be a tool for tax planning. By setting prices for intra-company transactions, MNCs can adjust the allocation of profits between their subsidiaries in different countries, which can impact the overall tax liability of the corporation. This practice has been subject to increased scrutiny by tax authorities in recent years, as there is a risk that companies may manipulate their transfer prices to avoid paying taxes on their profits.

_____________________ Can Be Used to Allocate Taxable Income Between Different