Question

(b) what is transfer pricing? Why do the transnational corporations resort to transfer pricing?Spykan

Answer 1

heya mate!!!!

transfer pricing refers to rules and methods of pricing transactions within and between the enterprises under common ownership or control

hope it helps u dear mate

Answer 2

a) Transfer pricing is referred to as the price at which transactions take place between different subsidiaries or divisions of a company located in different countries.

b) Transnational Corporations resort to transfer pricing for getting huge profits without making any changes in physical capital, because tax rates are different in different countries and so by making respective adjustments in the transfer price,they can reduce their burden of tax.