Which of the following is true concerning transfer pricing practices?
A) The U.S. is a relatively rigorous country in terms of transfer pricing, but British are relatively lax.
B) U.S. tax law does not allow U.S. firms to use arms-length prices.
C) U.S. companies can apply for an Advanced Determination Ruling on their transfer pricing policies, except for transfers to developing countries.
D) The United States is not the only country to use Advanced Determination Rulings.

Question

Quizplus · Accepted Answer

The statement that the United States is not the only country to use Advanced Determination Rulings indicates that other countries also use this practice. Therefore, option D is the correct answer. Option A is not true as it makes a generalized statement about countries without providing any evidence. Option B is false as U.S. tax law requires firms to use arms-length pricing. Option C is false as companies can apply for an Advanced Determination Ruling for transfers to developing countries as well.

Which of the Following Is True Concerning Transfer Pricing Practices