There are international agreements on taxation. Tax authorities can also work with taxpayers and agree on the transfer price for goods and services in advance.

There are international agreements on taxation. Tax authorities can also work with taxpayers and agree on the transfer price for goods and services in advance. Tax loopholes typically refer to ambiguous rules. In this case, the IRS was excruciatingly detailed on how to price related party intellectual property transfers. I always laugh about how congress / citizens get angry at when taxpayers follow their laws. Yes, I agree the laws are ridiculous, but no more ridiculous than the standard deduction the mortgage interest deduction and a myriad of other arbitrary tax laws.