Transfer Pricing Becomes Especially Complex When the Global Market Is

question 154

Multiple Choice

Transfer pricing becomes especially complex when the global market is involved because:

• A)shipping materials across national lines involves payment of duties and taxes, and these become part of the total price of the goods.
• B)issues of quality control can be serious, even when divisions of the same firm are involved.
• C)a firm with activities in several countries can use transfer pricing as a tax-avoidance device and governments frown upon such activities.
• D)the temperature and humidity differences between origins and destinations often damage the products.

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Definitions:

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