Video: Transfer Pricing

In this lesson, Nick Palazzolo, CPA, dives into the complexities of transfer pricing and its implications for multinational corporations engaging in transactions between related parties. He explains how transfer pricing affects the allocation of profits and taxable income across various tax jurisdictions, and why it's closely monitored by tax authorities. Through clear examples, Nick demystifies the concept, illustrating how companies might use transfer pricing to their advantage and the potential consequences they face when manipulating these intercompany transactions. By walking through a numerical example, he conveys the importance of understanding transfer pricing and assures that, while detailed calculations aren't necessary for the exam, comprehension of the topic is crucial.