Analysis on Transfer Price Discrimination of Intermediate Product Based on Tax

摘要

Based on linear demand function of final product market, the paper built a perfect and complete information dynamic game model to analyze the transfer price discrimination in multinational enterprises when the divisions face different tax rates. And then got strategies about transfer price of the enterprises. Based on this, it is concluded that the internal transfer price is lower than the external transfer price and the downstream division will be more competitive in the final product market.