transfer pricing

transfer pricing
n.
The practice of transferring goods, services, loans, intellectual property, or other commodities to other jurisdictions or countries in order to set prices at local levels and gain tax advantages.

The Essential Law Dictionary. — Sphinx Publishing, An imprint of Sourcebooks, Inc. . 2008.


transfer pricing
Prices at which associated entities transfer goods, services and other assets between each other, for example, between group companies. In the absence of preventative legislation, connected companies would be able to manipulate transfer prices to create tax advantages by, for example, setting them at a level which would enable them to move profits to a lower tax jurisdiction.
Anti-avoidance legislation in many jurisdictions (including the UK) permits the tax authorities to adjust the amount of income earned or expense accrued on transactions between affiliates, including intra-group debt and related interest, where it appears that the transaction was not at arm's length.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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