Sub: Finance Topic: Transfer pricing
Finding the transfer price in different situations.
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Harpoon, Inc., is a U.S. multinational corporation that ships small appliances to its subsidiary in
Austria. The marginal profits tax rate in the United States is 34 percent, and the marginal profits
tax rate in Austria is 55 percent. The U.S. taxes foreign subsidiary income only when
repatriated, and allows a credit for foreign taxes paid. Austria has a 20 percent withholding tax
on dividend payments, for which the United States gives a complete tax credit.