Transfer Pricing Associate Interview Questions and Answers

Cost plus method is a transfer pricing technique where a markup is added to the cost of production to determine the transfer price.

• Involves adding a markup to the cost of production

• Commonly used when the controlled transaction involves tangible goods

• Ensures that the selling entity earns a profit margin on top of the production cost

• Can be calculated based on comparable transactions in the market

Transfer pricing is the setting of prices for goods and services sold between related entities within a company.

• Transfer pricing ensures that transactions between related entities are conducted at arm's length to prevent tax evasion.

• It involves determining the appropriate price for goods or services transferred between different parts of a multinational company.

• Transfer pricing can impact a company's tax liabilities and financial statements.

• Examples include setting prices for...read more