4 ms·
Honest question: if the California subsidiary is able to provide those services at the set fees (i.e. pay salaries, etc.), how can it be considered "below marke
by eots 11y ago
Honest question: if the California subsidiary is able to provide those services at the set fees (i.e. pay salaries, etc.), how can it be considered "below market price"? Is it required by law to make a profit?
- morgante 11y agoIt's fairly nuanced and there are different standards used, but one key one is arm's length pricing. You need to charge what you would charge an arm's length customer (ie. market price). Another standard does, in fact, set a minimum level of transactional profit based on comparable businesses. [0] [0] https://en.wikipedia.org/wiki/Transfer_pricing#Comparable_profits_method https://en.wikipedia.org/wiki/Transfer_pricing#Comparable_pr...