International Lamp Company (ILC), a U.S. taxpayer, manufactures crystal chandeliers at its wholly-owed subsidiary in Poland (Polampa) at a production cost of $185 per chandelier. Polampa chandeliers are sold to two customers in the United States-Lighting Supermart (an ILC wholly-owned subsidiary) and Home Store (an unaffiliated customer). Polampa and Lighting Supermart are related parties and transactions between them fall under Section 482 of the U.S. Internal Revenue Code. The cost to transport the chandeliers to the United States is $15 per unit and is paid by Polampa. Other Polish manufacturers of crystal chandeliers sell to customers in the United States at a markup on total cost (production plus transportation cost) of 40 percent. Polampa sells chandeliers to Home Store at a landed price of $320 per unit (Polampa pays transportation costs). Home Store pays applicable U.S. import duties of 2 percent on its purchases of chandeliers. Lighting Supermart also pays import duties on its purchases from Polampa. Consistent with industry practice, Home Store places a 50 percent markup on the total cost of a chandelier and sells them at a retail price of $389.60 per unit. Lighting Supermart sells Polampa chandeliers at a retail price of $359.00 per unit. Polampa is a Polish taxpayer, and Lighting Supermart is a U.S. taxpayer. Assume the following tax rates apply: Polish corporate income tax rate.... Polish withholding tax rate on dividends.. U.S. corporate income tax rate. . U.S. ad valorem import duty.. 19% 19% 21% 2%