Transfer pricing has been used by multinational corporation to:
A) Minimize tax payments in foreign countries
B) Minimize import tariffs
C) Minimize foreign exchange controls
D) All of the above are correct.

Question

Quizplus · Accepted Answer

Transfer pricing is used by multinational corporations to minimize tax payments in foreign countries, minimize import tariffs, and minimize foreign exchange controls, all of which are correct. It involves setting the price for the transfer of goods or services between different divisions or subsidiaries within the same company to reduce tax liabilities and increase profits. This practice can be legal as long as the prices are set at the market value, but it can also be abused to shift profits to low-tax jurisdictions, depriving governments of needed revenue.

Transfer Pricing Has Been Used by Multinational Corporation To