Question: What is transfer pricing? Why is transfer pricing important to the following? Internal Revenue Service (IRS) International trade Why does a company use transfer pricing?

  • What is transfer pricing? Why is transfer pricing important to the following?
    • Internal Revenue Service (IRS)
    • International trade
  • Why does a company use transfer pricing? Name at least 2 benefits and 2 drawbacks to transfer pricing.
  • What are the tax planning implications of transfer pricing (e.g., recognition of gains and losses)? Is it ethical for a company to utilize transfer pricing to its benefit?
  • How do the Organisation for Economic Co-operation and Development (OECD) guidelines assist in resolving transfer pricing disputes?
  • Research an organization that currently uses or has used transfer pricing, and explain why you think it chose to do so.

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