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    Transfer Pricing

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    atulrlondhe143
    Transfer pricing refers to pricing goods transferred between company units in different countries. The objectives are to maximize profits, facilitate parent control, and provide an evaluation basis for divisions. The main pricing methods are local cost plus markup, most efficient producer cost plus markup, negotiated prices, and arms-length prices. Strategies include minimizing prices to high-tariff countries and overpricing goods sent to high-tax countries.

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    Transfer Pricing

    Uploaded by

    atulrlondhe143
    202 views5 pages
    Transfer pricing refers to pricing goods transferred between company units in different countries. The objectives are to maximize profits, facilitate parent control, and provide an evaluation basis for divisions. The main pricing methods are local cost plus markup, most efficient producer cost plus markup, negotiated prices, and arms-length prices. Strategies include minimizing prices to high-tariff countries and overpricing goods sent to high-tax countries.

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    Transfer pricing refers to pricing goods transferred between company units in different countries. The objectives are to maximize profits, facilitate parent control, and provide an evaluation basis for divisions. The main pricing methods are local cost plus markup, most efficient producer cost plus markup, negotiated prices, and arms-length prices. Strategies include minimizing prices to high-tariff countries and overpricing goods sent to high-tax countries.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    202 views5 pages

    Transfer Pricing

    Uploaded by

    atulrlondhe143
    Transfer pricing refers to pricing goods transferred between company units in different countries. The objectives are to maximize profits, facilitate parent control, and provide an evaluation basis for divisions. The main pricing methods are local cost plus markup, most efficient producer cost plus markup, negotiated prices, and arms-length prices. Strategies include minimizing prices to high-tariff countries and overpricing goods sent to high-tax countries.

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    Download as PPT, PDF, TXT or read online from Scribd
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    Transfer Pricing

    Transfer pricing or intracompany pricing


    refers to the pricing of goods transferred
    from operations or sales units in one
    country to the company’s unit elsewhere.
    The important objectives of transfer pricing are
    1) To maximise the total profits of the company.
    2) To facilitate parent-company control
    3) To offer management at all levels , both in the
    product divisions and in the international
    divisions , an adequate basis for maintaining,
    developing and receiving credit for their own
    profitability.
    The four main types of transfer pricing methods
    are
    1)Sales at the local manufacturing cost plus a
    standard mark up
    2) Sales at the cost of the most efficient
    producer in the company plus a standard
    markup
    3) Sales at negotiated prices
    4) Arm’s length sales using the same prices as
    quoted to independent customers.
    Strategies associated with transfer
    pricing
    When goods are shipped to high –tariff
    countries, minimal transfer prices are quoted to
    reduce the effect of duty.
    To reduce income tax, goods are overpriced
    when transferred to units in high –tax countries
    When dividend repatriation is curtailed by
    government policy, income may be taken out in
    the form of high prices for products or
    components shipped to units in that country.

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