Page 15 - International Taxation IRS Training Guides

Income Shifting Outbound

enterprises (MNEs) may own one
 U.S. multinational

more foreign entities (“related parties”).
or

business with each
 When two related parties transact
other,
the possibility exists that the price paid may be

and differences
affected by the related party status,

from
the prices that would be negotiated at arm’s
length between unrelated parties could be motivated

by differences in domestic and foreign tax rates.

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