Question

Which of the following is one of the gains derived by adjusting transfer prices?

A) The firm can reduce its tax liabilities by using transfer prices to shift earnings from a low-tax country to a high-tax one.
B) The firm can use transfer prices to move funds out of a country where a significant currency appreciation is expected.
C) The firm can use transfer prices to move funds from a parent company to the subsidiary (or a tax haven) when financial transfers in the form of dividends are restricted or blocked by host-country government policies.
D) The firm can use transfer prices to reduce the import duties it must pay when an ad valorem tariff is in force a tariff assessed as a percentage of value.

Answer

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