Question

What is the connection between export import policy with International Taxation? (Explain and relate the answer with Transfer Pricing)

Answer 1

Answer:
There is a strong coorelation between export import policy and international taxation. If import policy of a country impose more import duty on a particular goods and services compare to the international transfer pricing imposed on it, in that case organization may opt for creating a subsidiery business in other country and just transferring the profit incurred by it by paying smaller amount of international transfer price.
International tranfer price refers to the rules and methods for pricing transaction between or within enterprises under common ownership or control.
Similarly, if international transfer pricing is more than import duty in this case importing the goods and services would be more profitable business for the enterprises and they follow the same to increase their profit.

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