Buzzword: Transfer pricing
Life is hard enough without having to decipher everything. Each week, Marketplace Money brings you a word or a phrase that has bubbled to the top of the news. For instance, transfer pricing. You hear it, you see it, but do you really know it?
The biggest tax settlement in U.S. history brings us this week's Marketplace Money buzzword: transfer pricing.
Transfer pricing is a practice many multi-national corporations use to cook their books.
One example is attributing corporate profits to a subsidiary in a country with low taxes. This week the IRS ordered drug company Glaxo Smith Kline to pay $3.4 billion for doing just that.
The company could probably use a dose of its Zantac heartburn medicine.
If you're feeling bad for them, don't worry. A company spokesman claims Glaxo could have paid another $12 billion had it lost in court.
