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Transfer pricing
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Transfer pricing is a method of pricing goods and services transferred within a multinational company in order to reduce tax burdens and maximise profits for the whole enterprise. It is one of the reasons why globalisation has increased and why operating in more than one territory can be beneficial for firms looking to minimise their overall tax liability. The purpose of transfer pricing is to push profits into territories where either the tax rates are more favourable, or where more loopholes exist to be exploited.