Should Minimizing Taxes Be the Only Goal of Transfer Pricing? POINT When the members of a corporate family, such as a parent corporation and subsidiary, are lo- cated in different countries, transfer pricing affects taxes owed, and, therefore, company profits. This makes transfer pricing a very large matter ofoperational importance, but also creates a sig- nificant corporate tax issue. Consider the following scenario: A company subsidiary is located in Country A, where the tax rate is 30 percent. The subsidiary builds a product at a cost of $100 and then exports the product to the parent company, located in Country Bat a transfer-selling price of $300. The parent company sells the product for $500. Thus, each company, the parent and sub- sidiary, earns a profit of $200. The tax rate in Country B is 60 percent, which is much higher than the tax rate of30 percent in Country A. The company's consolidated, after-tax profit is $220, com- puted as shown