International transfer pricing, Managerial Accounting

International Transfer pricing

International transfer pricing refers to the determination of prices to be charged between related persons and in particular within a multinational enterprise for transactions between various group members (sales of goods, the provision of services, transfer and use of patents and know-how granting of loans etc.) As these prices are not negotiated in an open market they might deviate from prices agreed upon by non-related trading associates in comparable transactions under similar circumstances.

The above leads to a special interest on the part of tax authorities in intra-group transactions and especially in cross- border transactions. In many circumstances the tax authorities would seek to adjust the prices adopted in these transactions to arm’s length prices. However, the intra-group trading partners themselves may find it difficult to settle on satisfactory transfer prices, even if they are in many cases no comparable transactions in the open market. In such circumstances the tax authorities may seek to arrive at the arm’s length price by using cost-based methods or methods based on the price changed to the final customer – the ‘resale minus’ or resale price method or any other which can produce an acceptable result. 

Posted Date: 12/8/2012 5:24:37 AM | Location : United States







Related Discussions:- International transfer pricing, Assignment Help, Ask Question on International transfer pricing, Get Answer, Expert's Help, International transfer pricing Discussions

Write discussion on International transfer pricing
Your posts are moderated
Related Questions
Required: 1. Using the information provided prepare a Balance Sheet. Separate the current assets from non-current assets and provide a total for each. Also separate the current li

What are the Limitation of performance budgeting 1) It dose not facilitate qualitative evaluation. 2) The success depends on the well organized departments, but this may not b

how to journalize entry. purchased $150,000 of raw materials on account, terms of 2/20; n/30

Q. Evaluate a proposed investment? BMP Consulting (BMPC) conducted an analysis of Delta Corp. and found that the firm consists of two different divisions: Pet Lovers, a pet sup

Sources of Working Capital Finance Working capital finance may be classified in the subsequent: Spontaneous Source of Finance Finance that naturally arises in

Advance Factoring and Maturity Factoring: In both recourse and non-recourse factoring whether the factor advances cash against book debts to the client instantly on assignment

Optimum Solution From the stand point of implementing the LP solution, the mathematical classification of the variables as basic and non-basic is of no importance and should be

Types of Costs In short run, costs can be of three general kinds: Fixed Cost: Total fixed costs stay constant as volume differs in the relevant range of production. Fixe

Echeverria SA is an Argentinian manufacturing company whose total factory overhead costs fluctuate somewhat from year to year according to the number of machine-hours worked in its

Planning Planning is the fundamental function of the management by means of which the managers decide: What goals are to be accomplished How they will be accomplished.