Ultimate guide to Transfer Pricing
The term Transfer Pricing refers to the pricing of goods or services which are exchanged between two or more related parties of the same multinational group. Sometimes, related parties are also called associated enterprises or depending companies. As a definition, business transaction parties are related to each other if certain criteria of ownership, management, rights, or economic dependency are met. Such criteria are usually defined by local law, primarily by tax law and corporate law. The subject area Transfer Pricing is construed of, and linked to, three areas of law: the law of obligations, the corporate law, and the tax law. Referring to the law of obligations, the Transfer Price is the reward on the exchange of a good or product, the delivery of a service, the right to use assets of other owners, or a guarantee received, if such exchanges occur between related parties. Transfer Pricing, actually, is a matter of subject for legal entities and/or permanent establishments, belong