answersLogoWhite

0


You mean TRANSFER PRICING.

Transfer Pricing is done by large Transnational corporations who are able to use management accounting techniques to move costs and profits to different jurisdictions.

Say you have a large company making Airplanes... with an engine factory in one country and sales around the world...

By using "creative" accounting, you can make sure that your profits all come from low-tax regions, and your costs are in the high tax regions/countries. This way, you get the maximum tax writeoff and can keep the most of your money instead of paying it out in taxes.

User Avatar

Wiki User

13y ago

What else can I help you with?

Related Questions

What do you mean by transfer pricing?

transfer pricing is in the case of transferred with in the organisation the pricing of contribution for assets ,


What do you mean by transfer?

transfer pricing is in the case of transferred with in the organisation the pricing of contribution for assets ,


What is the nature of transfer pricing?

what are the nature of transfer


What do you mean by pricing?

transfer pricing is in the case of transferred with in the organisation the pricing of contribution for assets ,


What is the meaning of funds transfer pricing?

tranfor price


The concept of transfer pricing involves the role of?

multinational corporations


What has the author Lars Nieckels written?

Lars Nieckels has written: 'Transfer pricing in multinational firms' -- subject(s): Heuristic programming, International business enterprises, Mathematical models, Transfer pricing


What has the author Kimberly A Clausing written?

Kimberly A. Clausing has written: 'The impact of transfer pricing on intrafirm trade' -- subject(s): American Corporations, Corporations, American, Econometric models, Intra-firm trade, Taxation, Transfer pricing


What has the author R Turner written?

R. Turner has written: 'Study on transfer pricing'


What has the author Robert Feinschreiber written?

Robert Feinschreiber has written: 'Transfer Pricing Handbook, 1995 Cumulative Supplement 1' 'Trnsfer Pricing Handbook, 1998 Supplement No. 1' 'Earnings and Profits' 'Tax incentives for U.S. exports' -- subject(s): Export sales contracts, Foreign income, Income tax, Law and legislation, Tax incentives, Taxation 'Tax Reporting for Foreign-Owned U.S. Corporations 1995' 'Transfer Pricing Handbook' 'Transfer Pricing Handbook' 'Transfer pricing handbook' -- subject(s): Taxation, Transfer pricing, Law and legislation, Business enterprises, Consolidation and merger of corporations, Finance, Purchasing, History and criticism, African American authors, Violence in literature, Lynching in literature, African Americans in popular culture, American literature 'Allocation and apportionment of deductions' -- subject(s): Deductions, International business enterprises, Taxation


Intersegment transfer pricing policy?

Transfer pricing refers to the pricing of contributions (assets, tangible and intangible, services, and funds) transferred within an organization. For example, goods from the production division may be sold to the marketing division, or goods from a parent company may be sold to a foreign subsidiary. Since the prices are set within an organisation (i.e., controlled), the typical market mechanisms that establish prices for such transactions between third parties may not apply. The choice of the transfer price will affect the allocation of the total profit among the parts of the company. This is a major concern for fiscal authorities who worry that multi-national entities may set transfer prices on cross-border transactions to reduce taxable profits in their jurisdiction. This has led to the rise of transfer pricing regulations and enforcement, making transfer pricing a major tax compliance issue for multi-national companies.


Why is it a good idea for companies to do transfer pricing?

By doing transfer pricing, companies are able to reduce their overall contribution to the taxes they have to pay to their individual governments every year. This allows them to increase their profits and thereby either pay employees more or be able to expand.