All of the Following Are Correct Statements About Transfers Between

question 55

Multiple Choice

All of the following are correct statements about transfers between divisions located in countries with different tax rates except that

• A) differences in tax rates across countries complicate the determination of the appro-priate transfer price.
• B) many companies prefer to report more income in countries with low tax rates.
• C) companies must pay income tax in the country where income is generated.
• D) a decreasing number of transfers are between divisions located in different countries.

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Definitions:

Incidental Beneficiary

A third party who might benefit from a contract between two other parties but does not have legal rights to enforce the contract terms.

Assignment

The transfer of rights, duties, or property from one party to another, often used in the context of contracts or real estate.

Third-Party Beneficiary

An individual or entity that is not directly involved in a contract but stands to benefit from it as specified by the contracting parties.

Contract

A legally binding agreement between two or more parties that outlines obligations and rights with respect to each other.