Académique Documents
Professionnel Documents
Culture Documents
Transfer Prices
1Goal Congruence
2 Management Effort
4 Subunit Autonomy
Purpose of Transfer Pricing
1Market
Based
2Cost
Based
3Negotiated
Market-Based Transfer Prices
Full cost
Variable costs
Dual Pricing
Variable-Cost Pricing
● When market prices
cannot be used,
versions of “cost-plus-
a-profit” are often
used as a fair
substitute.
Variable-Cost Pricing
Rs100 Why?
Multinational Transfer Pricing
Example
a) Tax regimes
b) Local Market conditions
c) Market Imperfections
d) Joint-venture partner
Key drivers behind transfer pricing
in Foreign Countries:
Market Conditions
Competition
Profit for the affiliate
Tax Rates
Key drivers behind transfer pricing
in Foreign Countries:
Economic conditions
Import Restrictions
Customs Duties
Price Controls
Exchange Controls
Setting Transfer Prices