Transfers between divisions located in countries with different tax rates
A)simplify the determination of the appropriate transfer price.
B)are decreasing in number as more companies "localize" operations.
C)encourage companies to report more income in countries with low tax rates.
D)all of these are correct.

Question

Quizplus · Accepted Answer

Transfers between divisions in countries with different tax rates encourage companies to report more income in countries with low tax rates to minimize their overall tax burden. This is a common tax strategy known as profit shifting.

Transfers Between Divisions Located in Countries with Different Tax Rates