Transfer pricing refers to the pricing of goods, services and intellectual property transferred between related entities within a multinational corporation. Companies use transfer pricing to allocate costs and revenues across different jurisdictions, whi
Depending on the production capacity and the demand for each subunit’s goods or services, a transfer price could be based on cost, market prices, variable costs plus an opportunity cost, or some other amount. A concern with transfer pricing is whether the transfer price will cause a subunit...
What is transfer pricing?doi:10.1016/B978-1-85573-372-5.50006-5John SmullenTransfer Pricing for Financial Institutions
Transfer pricing benchmarking RoyaltyRange can prepare you a Benchmarking Study that analyzes comparable agreements, including royalty rates, service fees and loans interest rates, to help you identify whether your internal company transactions adhere to the arm’s length principle. Our data is fully ...
Having an arm’s length transfer pricing policy is a great first step, but if you want to get to heaven, it helps to ensure that these policies are followed in practice. Operational Transfer Pricing (OTP) is the coordination of people, processes, and technology to help ensure that companies...
As an example of how transfer pricing works, let’s use a hypothetical company and subsidiaries: 1. ABC Golf Manufacturing Co., based in the United States, is the parent company and makes clubs and irons and owns all intellectual property related to the business. 2. ABC Golf Distribution Co...
Transfer pricing is a legal technique used by large businesses to move profits around from parent companies to subsidiaries and affiliates to ensure funds are evenly distributed. However, many multinational corporations use it as a tactic to lower their tax burdens and end up fighting the IRS in ...
It’s essential for multinational companies to understand how to apply transfer pricing policies for tax purposes. Explore our transfer pricing definition.
There is a lot of interest in transfer pricing and it can sometimes come under scrutiny. This is particular true in regards to how this is done within a multinational company. By changing the price of these resources there will be an influence on the profitability of that division. This coul...
and juggling multiple disparate finance, invoicing, and receivables systems. Taking control of transfer pricing processes with sound intercompany financial management practices is a corporate imperative, especially given the scarcity of qualified transfer pricing talent and the high cost of outsourced options...