Transfer Price

[talkgold]

Transfer Price
In many very large companies, there are divisions within that company that operate independently of one another. These transfer prices are simply the prices for exchanging, goods, materials etc withing a large company. This is used to be able to track expenses properly, and make sure each division within the company is using it's budgets properly.

[engedi05]

i see

[snitsky0111]

i see thnx

[snitsky0111]

cntct me on yahoo mcnger please wud like sum info

[bhubiz]

This Is Related To Internal Finance

[Mackie]

I don't mean to question an administrator, but are you sure?

Transfer pricing is all about booking profits in tax efficient environments. Usually it is used in an import / export type environment - which with globalisation, means pretty much everything.

An object is made in China, for example, and then 'sold' to an offshore entity, in the Caribbean or wherever, and then sold on to the firm that retails it in the USA, for example. Essentially it might all be the same firm, only subsidiaries of it. The bulk of the profits are then earned in a tax free home to be reinvested at higher rates of return.

My best friend has been doing this for a major accounting firm for 10 years. It's quite interesting, but viewed with deep suspicion by politicians and the general public.

Anyhow, hope that helps.

Best wishes.

[danky]

thank you so much !

[magmag]

What is new here ?