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Transfer pricing

International transfer pricing

A multinational company will try to minimise the group’s total tax liability.

One way of doing this may be to use transfer pricing to reduce the profitability of its
subsidiaries in high-tax countries, and/or increase the profitability of its subsidiaries in
low tax countries.

Illustrations and further practice

Now read the ‘Taxation and transfer pricing’ illustration and attempt the
‘Seacross’ example from Chapter 9.

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