Hedging and Transfer Pricing

Knowledge Center


New Topic

Student (MBA), Kenya

Hedging and Transfer Pricing

What is the relationship between hedging and transfer pricing?

  Jaap de Jonge
Editor, Netherlands

Hedging and Transfer Pricing

Transfer Pricing refers to actions relating to setting appropriate prices for transactions between related parties, typically among divisions in large firms when they are supplying each other with certain goods or services. In this definition, ‘appropriate’ is most commonly defined as ‘at arm’s length’.
Under the arm’s length principle, related tax payers must set transfer prices for any intercompany transaction in the same way as they would be set by unrelated firms in the marketplace, while keeping all other aspects of the relationship unchanged.
Transfer pricing must accommodate for differences between tax regimes of countries and valuta risks. These risks can be hedged (insured against).

Participate and leave a comment
Exchanging your ideas stimulates your personal and professional development. And you can help other people! Please motivate your point of view. You can still edit your comment for 3 hours.

Start a new forum topic


More on Hedging
🔥Types and Applications of Derivative Products
Hedging and Transfer Pricing
Special Interest Group

Are you interested in Hedging? Sign up for free

Notify your students

Copy this into your study materials:

and add a hyperlink to:

Link to this discussion

Copy this HTML code to your web site:

Knowledge Center

About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
© 2021 12manage - The Executive Fast Track. V15.8 - Last updated: 16-5-2021. All names ™ of their owners.