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Items are handled in two separate subsidiaries. Production is in a low tax rate country and the marketing is done in a high tax country.
Items are handled in two separate subsidiaries. Production is in a low tax rate country and the marketing is done in a high tax country. If the company wants to minimize its worldwide tax liability, it would stop producing in the low tax country set a low transfer price when selling production to the marketing subsidiary stop marketing in the high tax country set a high transfer price when selling production to the marketing subsidiary
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