Why do transnational corporations become resort to transfer pricing
Answers
Transfer pricing is an associate corporation or within the same corporation. In hole country the subsidiary for selling goods and services to know how the other country subsidiary is going on.
All kinds of transactions with the corporations for the transfer pricing to include various finished products with raw materials and other managements fees and payments. Moreover, the pricing is not independent in arms of strength and transaction between them. The subsidiary corporations between the parties will be controlled by open market government considerations.
Answer:
Transfer pricing is the practice of exchanging goods, services, loans, royalties, properties, and even labour, among the affiliates of the same company.
Transactional companies resort to transfer pricing mainly with the aim of saving tax bills. Since the profits shown are kept to the minimum, their tax bills are low too and thus the companies are saved from paying hefty taxes.
Explanation: