Question

what is transfer pricing?why do the transnational corporation resort to transfer pricing?

Answer 1

Answer:Transnational Corporations resort to transfer pricing in order to enjoy huge profits without any change in physical capital, because tax rates are different in different countries and so by making respective adjustments in the transfer price can reduce their tax burden.

Explanation:

Answer 2

Thses are practices to prevent tax fluctuation in companies and government beteee nations.

Explanation:

• As various companies have different systems of taxation, transfer pricing aims to put rules and regulations for enterprises and ownerships. The tax authorities in many countries adjust the intergroup prices that differ.

• The World Bank and OECD countries recommend rules that are based on certain principles. This includes the transfer of tangible and intangible property. They are done to resolve the disputes that may arise between the government and taxpayers.

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