INTERNATIONAL TRANSFER PRICING

Abstract

The goals of transfer pricing are to assign a monetary value to a transfer and to minimize the taxes paid by a company as whole. However, because a single company can now have operations literally around the world, transfer pricing has become a very complicated, costly, and lucrative business strategy. The purpose of this paper is to explore the effects of transfer pricing on both the company, its divisions, as well as the countries involved in the transaction. We will also discuss the consequences of transfer pricing on the bottom line of a company and a country, the tax planning opportunities, the effects on company personnel, and the ethical implications of this practice.