Transfer Pricing Within Conglomerate Business Structures and Multinational Corporations

The growth of multinational corporations and conglomerate firms is one of the effects of globalization and the vast expansion of the global economy. The complexity of these company structures has, however, become a major cause of concern for governments around the globe, particularly with regard to tax compliance. These organizations frequently abuse transfer pricing because of their intricate corporate structures in an effort to lower or avoid tax burden. This article investigates the concept of the transfer price by looking at the characteristics of multinational corporations and conglomerate enterprises, as well as the purposes and objectives of a transfer pricing scheme. After establishing that conglomerate corporate structures and multinational companies are elaborately designed to function as a safe haven for the abuse of transfer pricing, it investigates the different negative consequences of transfer pricing abuse throughout these corporate structures