Transfer Pricing
Category: Tax
Definition (plain English)
Transfer pricing is the pricing of goods, services, or intangibles between related entities in different tax jurisdictions under the arm’s-length principle. It affects taxable profit allocation and documentation obligations.
Why it matters commercially
Transfer Pricing changes tax treatment and filing obligations, so mistakes can create reassessments, penalties, or blocked recoveries.
Example
Broker and importer aligned transfer pricing details before filing to avoid holds, reassessment, or post-clearance corrections.
Common mistake
Applying Transfer Pricing based on assumptions from another country or flow without validating eligibility conditions.
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