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Taxes

Primary adjustment

Let's delve into the concept of transfer pricing, a crucial aspect of international taxation. Simply put, transfer pricing refers to the pricing of goods or services between related companies in different tax jurisdictions. To ensure fairness and avoid tax evasion, tax administrations follow the arm's length principle which requires the transaction to be at market value. This may result in adjustments to a company's taxable profits, made by the first jurisdiction, to reflect a fair price for transactions involving associated enterprises in the second jurisdiction.

Related terms

Self-assessment

Understand the meaning and definition of Self-assessment in the context of stock market, trading, and investments.

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Pre-tax profits

Understand the meaning and definition of Pre-tax profits in the context of stock market, trading, and investments.

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International taxation

Understand the meaning and definition of International taxation in the context of stock market, trading, and investments.

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Indirect-charge method

Understand the meaning and definition of Indirect-charge method in the context of stock market, trading, and investments.

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Fixed income

Understand the meaning and definition of Fixed income in the context of stock market, trading, and investments.

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