Review numerical example- 2 on Transfer pricing with a tax differential between the countries and a tariff (or import duty) in country B. Now choose, for the multinational corporation, the best reasoning and strategy (assuming the government and the tax authorities do not intervene here): Use transfer price (TP) of $15, because a low transfer price benefits the multinational corporation Use transfer price (TP) of $15, because you save on import duty compared to TP of $18 Use a golden mean transfer price (TP*), which minimizes the total taxes paid across both countries and import duties. Use transfer price (TP) of $18, because you save on total taxes paid to two countries