Transfer pricing as a tool of corporate tax planning

Abstract

The author considers transfer pricing as a tool of corporate policy for profitability improvement by allocation of financial assets in low-tax countries and territories. Within the theoretical justifi cation for the use of transfer prices the author shows that such pricing practices in multinational companies adversely affect the functioning of market tools. Special attention is paid to the questions of international transfer pricing regulations. The author outlines also the features of transfer pricing practices in Russian companies.