6

In a trade between subsidiaries, a WOS located in a low tax country will charge lowest possible transfer price for the sales of goods to a WOS located in a high tax country. Which of the following statement is FALSE?

Group of answer choices

In a trade between subsidiaries, a WOS located in a low tax country will charge lowest possible transfer price for the sales of goods to a WOS located in a high tax country.

Transfer pricing goods & services between subsidiaries can be used to minimize global tax bills of MNCs.

Adjusting transfer prices of goods & services traded between subsidiaries is one way of managing transfer risk.