Transfer Pricing
Transfer Pricing : This is the pricing of products, components and the like, traded among units within the same multinational enterprise. This practice can allow for the multinational to shift profits from one location to another, and also to have a reason for the shifting of production and other activities from one location to the other. The way transfer pricing works is that subsidiary A will sell to subsidiary B at an above normal price, when it is required to show a handsome profit in A, or a dismal loss in B. Though a common feature of multinational companies, this practice can also be found among the subsidiaries of national companies
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