Question

How do corporation have leverage transfer pricing and how import duties might influence transfer pricing policies?

Answer 1

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Explanation:

Corporations leverage transfer pricing to make use of the tax rate arbitrage available across the geographies. A multi national company (MNC) will like to allocate higher profits in a geography which influences the level of both direct and indirect taxes that governments collect. The price of cross-border transactions is the starting point for assessing customs duties and for determining profits arising to each party involved and therefore the allocation of tax bases among countries.