Factors Influencing the Selection of Methods and Determination of Transfer Pricing in Multinational Companies: A Case Study of United Kingdom

Abstract

One of the main problems of multinational companies occurs while determining the transfer pricing methodology on transfer pricing. Nevertheless, there are many different factors that influence the transfer prices. These factors can be classified as legal, political, internal and external factors. In this study, starting with the most significant point which can be called as the definition of transfer pricing, methodology of transfer pricing and the factors that affect the determination of transfer prices are investigated briefly. Besides the British application on transfer pricing, legal procedures and the studies with relevant application are reported with their results. Keyword: Transfer Pricing; United Kingdom; Multinational Companies JEL Classifications: M41; M16