Question 5

Your client, a US multinational company, is planning to manufacture certain of its products in a low tax international subsidiary ( 100% owned).This subsidiary would manufacture and sell the products to its US parent company, who would sell to an unrelated customer.

A) Briefly summarize the functions and risks that the company should consider in developing transfer pricing documentation for this transaction.

B) What information would you request from your client?

C) What financial reporting and tax return matters should the company consider?