Hello. I am through with the paper. please check it and get back to me if you need anything more. I uploaded two documents as we agreed. thank you and goodbye for now
Price setting includes setting up of prices for goods and services transfer in different
divisions or even the subsidiaries in a firm. The subsidiaries by some multinational corporations
found in various different countries are always subject to the regimes of tax. For the
multinational corporation, this is always an opportunity in setting the transfer prices in a manner
that the tax burden overall is reduced for the firm. Generally, corporations transfer their
revenues to other affiliates in foreign countries who have lower rates of corporate taxes.
Transfer pricing in tax evasion and effect to the government
The transfer pricing practices have had erosion in the tax base for Canada. This in return
reduces the revenues of the government. This is a result of the entities of multinational
corporations providing services from one another. Any transactions carried out among the
entities may not be along with the forces in the market and therefor prices are set in a way that
diverts the profits realized from the jurisdiction of tax. The Canadian government has ended up
enacting provisions on income tax which prevent practices such a...