Transfer pricing
In this lesson, you'll learn how transfer pricing works in multinational groups and why it's essential for tax compliance and fair profit allocation.
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In this lesson
- 0:00 Transfer pricing in multinationals overview
- 1:05 Types of inter-group transactions covered
- 2:17 Key objectives for multinational transfer pricing
- 3:34 Transfer pricing methods and approaches
- 5:44 Regulatory and compliance considerations
- 7:41 Ethical issues and social responsibility
About this lesson
Transfer pricing ensures that goods, services, and loans transferred between group entities are priced at arm's length—the price two independent parties would agree on in the open market. You'll explore the key transaction types (sales, purchases, royalties, management fees, and intercompany loans), understand the different pricing methods available (market-based, full cost, variable cost, and negotiated), and discover the critical factors that affect your pricing decisions, including tax regulations, import tariffs, exchange controls, and anti-dumping legislation. This topic is relevant across ACCA and CIMA qualifications, particularly in taxation and strategic modules, and understanding it will help you navigate the complex balance between legitimate tax planning, regulatory compliance, and ethical business practice.
Duration: 10m
Transcript
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