Glossary · Taxes

What is Transfer price?

Also known as: transfer pricing

The price used in a transaction between related parties, including between a parent and a subsidiary company. If such a price is set artificially lower or higher than the market price, profit can be "shifted" to where the tax is lower; that is why tax authorities check whether the price of such transactions matches market conditions; the procedure is set by tax legislation.

Source: OECD: Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations; O'zbekiston Respublikasi Soliq kodeksi

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More terms: Taxes

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