Transfer Pricing

This video introduces the concept of transfer pricing.

A transfer price is the price charged by the selling division to the buying division for an intermediate product within the same firm. Companies use transfer prices for internal purposes (to coordinate transfers within the firm) and for external purposes (reporting to tax authorities). For internal purposes, companies typically used market-based transfer pricing, cost-based transfer pricing, or negotiated transfer pricing. Companies may use a different transfer price for internal decision-making than the transfer price they report to tax authorities; if they do this, it is known as decoupling. However, most tax authorities require that companies report the transfer price as the price that would have been charged in an arm's length transaction. Even so, transfer pricing is the source of significant disputes as firms attempt to use transfer pricing to minimize their tax liability.—
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[andrews]

3 hour classes and you explain better than the prof under 7 min wtf am I doing with my money

[danielan]

learning it two hours before final, feels great.

[Thomasトーマス]

I've just watched over 50 of your videos in 48 hours for my exam tomorrow morning, Im French but your English is really clear, thank you sir !

[tonnynamasaka]

YouTube always got my back in my degree studies. I can't tell what a struggle it would have been if you were not there 😁

[---lxcz]

Thank you so much. You can explain the concepts so much better than my damn prof. I do hope you can upload more accounting videos. Again, Thank you !!

[yf]

Thank you so much!!! You are my life saver for three years

[madk]

Wow thank you so much hahahaha. Took a week for my professor to teach and still, I don't understand. U managed to make me understand in 7 minutes.

[kubiateffiwatt]

Your video is so well explained. Thanks so much

[ManpreetKaur-tovi]

Lecture is very good, but text which you write is unable to see

[guky]

but this is the way companies with different divisions do it. If a company just has its legal base in a "heaven" tax free place but all the company takes place in another country with no products such as "batteries"

[adilzoz]

I have a question. So you said that there are certain occasions when there is an external price, and an internal price. In other words, two different transfer prices. Does this imply that they're lying to tax authorities so that they get less tax imposed towards them? Thank you so much for answering my question.