Transfer Pricing Safe Harbors

Summary

This practice note discusses the transfer pricing safe harbors for taxpayers provided in the Internal Revenue Code and the Treasury Regulations. In the international tax context, transfer pricing is, in general, the setting of prices for transactions between commonly controlled companies in a multinational enterprise (MNE). The transfer pricing rules use the "arm's length principle" in determining how related parties in an MNE price their transactions to determine how profits and deductions are allocated within the MNE.