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Dear John,
How are you?
I hope you are doing well,
As per your lecture for transfer pricing, Could you explain the effect of tax factor because it is not covered in your lecture and the note also.
I know that it’s not required for F5 but Iam studying knowledge first then the certificate so could you explain please and you can workout an example if required.Thank you so much in advance ??
If a company is transferring to a subsidiary in another country which has a higher tax rate, then it makes sense to charge as high a transfer price as possible so that less profit is taxed in the other country and more profit is taxed in the home country where the tax rate is lower.
Many countries have provisions to stop this happening.
However, this is not in the syllabus and it would be wasting time to produce a numbers example.
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