What is the general rule for international transfer pricing advocated by the Organization for Economic Cooperation and Development (OECD)?

Question

Quizplus · Accepted Answer

The general rule for international transfer pricing advocated by the OECD is that transactions between related entities should be conducted at arm's-length prices, meaning the same prices would be charged as if the transaction was between unrelated parties. This is meant to prevent tax base erosion and profit shifting among multinational corporations. Choice A (cost-based prices) may not reflect market realities or the value of the product/service in question. Choice B (negotiated prices) may not be objective or based on market conditions. Choice D (discretionary prices) is not a recognized standard and may not ensure fairness in pricing.

What Is the General Rule for International Transfer Pricing Advocated