In order to maximize profits,multinationals typically use transfer pricing by showing ________ profits in the high-tax country and by showing ________ profits in the low-tax country.
A)high; low
B)low; high
C)economic; normal
D)above-normal; accounting

Question

Quizplus · Accepted Answer

The multinationals use transfer pricing by showing low profits in high-tax countries to minimize tax payments and high profits in low-tax countries to take advantage of lower tax rates. This allows them to maximize profits by reducing their overall tax burden.

In Order to Maximize Profits,multinationals Typically Use Transfer Pricing by Showing