U.S.multinational companies must follow the Internal Revenue Code when setting transfer prices.

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U.S. multinational companies must comply with the transfer pricing provisions of the Internal Revenue Code, including regulations issued by the IRS, when setting prices for transactions between related parties. These provisions are designed to ensure that transactions between related parties are conducted at arm's length and that profits are allocated in accordance with economic substance. Failure to comply with these provisions can result in significant penalties and interest charges, so it is essential that multinational companies engage in careful transfer pricing planning and documentation.

USMultinational Companies Must Follow the Internal Revenue Code When Setting