Transfer pricing refers to the prices set for transactions between related entities within the same multinational corporation. It has significant tax implications and is a major focus of international tax regulation.
Defining Transfer Pricing Transfer pricing refers to the prices charged for goods, services, intellectual property, or financing transactions between different parts of the same multinational corporation — for example, between a parent company and its subsidiaries, or between subsidiaries in different countries. Because these transactions occur within a single corporate group rather than between independent parties, the prices set are not determined by market forces. This gives MNCs significant