Tax avoidance is unethical when inflated transfer prices are used in international transactions to shift profits from a division in one country to a division in another country.

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Tax avoidance becomes unethical when inflated transfer prices are used to shift profits, as it distorts the true value of the transaction and results in a loss of revenue for the country where the profits were generated. However, using market-based prices in international transactions to transfer profits is considered legal and ethical as it ensures that the transaction is transparent and reflects the true value of goods or services exchanged.

Tax Avoidance Is Unethical When Inflated Transfer Prices Are Used