ABSTRACT
Many companies, particularly those with foreign parents, need to pay attention to the issue of “transfer pricing.” This arises since the value of imports and exports drives assessments made by regulatory agencies and the taxes paid on “profits” for transfers of materials and products within the company. The IRS is making good on a May 2003 directive aimed at curbing transfer‐pricing abuses. The practice, which involves the sale of goods from one business unit to another in a different country, is a notoriously gray area that has often confounded regulators. The author notes that many companies rely on logistics professionals to control “transfer pricing” matters, when it really requires supervision from financial, legal, and compliance officers.
