Problem: The ABC company has two Division :D1 & D2. D1 is in the USA and D2 is in Germany.D1"purchases"an intermediate product (P1) from D2. The US tax rate on corporate income is 35% and the German rate is 15%.If the company wants to minimize worldwide taxes ,what will it do with the transfer price of P1?
A.Lower the transfer price as much as tax law will permit.
B.Increase the transfer price as much as tax law will permit.
C.keep the transfer price the same irrespective of the tax rates.
D.Not enough data to determine what the company will do.