Plain meaning
Rules for pricing transactions between related parties across borders or within corporate groups.
Also called
arm's length price
transfer price
Key points
- Rules for pricing transactions between related parties across borders or within corporate groups.
- The exact result depends on the statute, program terms, administrative guidance, or court decision that applies.
- The concept can affect compliance obligations, eligibility, payment timing, or the economic effect of a policy measure.
- Transfer pricing affects multinational businesses, audits, tax treaties, and international tax revenue.
Why it comes up
Transfer pricing affects multinational businesses, audits, tax treaties, and international tax revenue. It can affect how tax rules are enacted, interpreted, enforced, challenged, or reported to the public.