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Transfer pricing is a technique used in international business finance to determine the price at which goods, services, or intangible assets are transferred between related entities of a multinational company operating in different countries. It plays a crucial role in allocating income and expenses among subsidiaries to ensure proper profit distribution and tax compliance. Since tax rates vary across countries, transfer pricing decisions can significantly influence a company’s overall tax liability. Therefore, multinational enterprises (MNEs) strategically use transfer pricing to optimize their global tax structure while adhering to international regulations set by tax ______ ______ _________ ___ ________.
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