MNC France co. Essay Assingment Help With Solution
A French multinational pharmaceutical company pays tax at 33% in France. It has a subsidiary in Ireland where the tax rate is 12,5 %. The Irish subsidiary has modern production facilities and can produce pharmaceutical which it sells to the French parent, which then handles sale of the products to the public. The price at which products are sold my MNC France is referred to as the ‘’transfer price’’.
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a) Explain the likely impact of respective tax rates on the transfer price;
b) State which of the national governments is likely to be concerned about this and why;
c) With respect to your answer to (b) describe the commonly used methods by which taxation authorities ensure MNC’S pay tax.
d) Discuss tax implications of the transfer pricing debate from the representative of the EU, including likely future developments
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