Transfer Pricing
When a multinational company sets the price for sales between its own subsidiaries in different countries — often to move profit to low-tax countries.
Real World
Apple routes profits through its Irish subsidiary Apple Sales International, where corporation tax rates are lower, a strategy that attracted a €13 billion EU tax ruling in 2016.
Exam Focus
When evaluating transfer pricing, always address both the business benefit and the ethical/reputational trade-off for a balanced argument.
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