What is Transfer Pricing?
A definition of Transfer Pricing
“Transfer pricing refers to the rules and methods for pricing transactions between enterprises under common ownership or control.”

Business Glossary > What is Transfer Pricing?
Examples of Transfer Pricing in a Sentence:
Transfer pricing is crucial for multinational companies with subsidiaries.
Auditors scrutinize transfer pricing to ensure compliance with tax regulations.
The company’s strategic use of transfer pricing helped optimize their tax responsibilities.
Why is Transfer Pricing Important in Business?
Transfer pricing is vital as it affects the tax liabilities of multinational companies. Proper regulation ensures that transactions reflect market values, preventing profit shifting and tax base erosion across borders.
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Associated Terms
Here are some associated business terms and synonyms for “Transfer Pricing”:
- Intercompany Pricing
- Controlled Transactions Pricing
- Intra-group Pricing
Apple Transfer Pricing
Apple Inc. has faced scrutiny over its transfer pricing strategies, especially concerning its subsidiaries in different countries. By strategically setting prices for intercompany transactions, Apple managed to reduce its tax burden across various jurisdictions.
Final Notes on Transfer Pricing
Companies engaging in international trade should consider:
- Adhering to the arm’s length principle
- The impact on global tax liabilities
- Documentation to support pricing strategies
These factors aid in navigating the complexities of transfer pricing regulations.
This has been a definition of Transfer Pricing meaning.
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