Transfer pricing and responsibility centres Student: Professor: Course title: Date: Transfer pricing and responsibility centres Transfer pricing is understood the method that is employed in selling products from one subsidiary to another subsidiary within a business organization. It occurs when 2 companies which are part of the same transnational corporation trade with each other (Boyd, 2010). A case in point is when a UK-based subsidiary of Pepsi purchases something from a Germany-based subsidiary of Pepsi. When the parties in the transaction establish a price for that transaction, then it is referred to as transfer pricing. Transfer pricing basically impacts the subsidiaries’ purchasing behaviour and might have income tax implications for the business organization as a whole. Even though it is not illicit or necessar
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