short presentation on objectives of transfer pricing . it group the objectives under domestic and international

1. 2015 1
VINCENT KONADU TAWIAH
OBJECTIVES OF
TRANSFER PRICING

2. INTRODUCTION
 Transfer pricing is the determination of price on the
exchange of goods or services between related parties.
 These transfers are also referred to as intercompany
transactions.
 Upstream transfers go from subsidiary to parent,
downstream transfers are from parent to subsidiary.
 Transfers also occurs between different subsidiaries of the
same parent.

3. FACTORS AFFECT TRANSFER PRICING
Objectives of the company
The regulations of the country e.g.
tax

4. OBJECTIVES OF TRANSFER PRICING
 Domestic objectives
• Greater divisional autonomy
• Greater motivation for
managers
• Better performance evaluation
• Better goal congruence

5. INTERNATIONAL OBJECTIVES
• Less taxes, duties, and tariffs
• Less foreign exchange risks
• Better competitive position
• Better governmental relations

6. CONCLUSION
 The price at which companies of the same group
sells or transfers goods and services to each other
depends on the objective of the parent and
individual companies within the group.
 The most common objective in transfer pricing is to
avoid or reduce tax thereby decreasing cost of
production and increasing profit.