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StuDocu is not sponsored or endorsed by any college or university Appunti e domande d'esame orale con risposte - Accounting finance & control - a.a. 2014/2015 Accounting finance & control (Politecnico di Milano) StuDocu is not sponsored or endorsed by any college or university Appunti e domande d'esame orale con risposte - Accounting finance & control - a.a. 2014/2015 Accounting finance & control (Politecnico di Milano) Scaricato da Alessandro Nava ([email protected]) lOMoARcPSD|2751981 1 Tell me about Transfer Prices in general? x Transfer pricing refers to the pricing of contributions (assets, tangible and intangible, services, and fun ds) transferred within an organization. For example, goods from the production division may be sold to the marketing division, or goods from a parent company may be sold to a foreign subsidiary. Since the prices are set within an organisation (i.e., controlled), the typical market mechanisms that establish prices for such transactions between third parties may not apply. The choice of the transfer price will affect the allocation of the total profit among the parts of the company. This is a major concern for fiscal authorities who worry that multi-national entities may set transfer prices on cross- border transactions to reduce taxable profits in their jurisdiction. This has led to the rise of transfer pricing regulations and enforcement, making transfer pricing a major tax compliance issue for multi-national companies. x TƌaŶsfeƌ pƌiĐe is a ͞fiĐtitious͟ pƌiĐe foƌ eǀaluatiŶg iŶtƌa-company exchanges: it is the price one division charges for a product or service supplied to another unit. o The transfer price is: A cost to the receiving division and A revenue to the supplying division o Once defined, transfer prices affects:…