Buzzword: Transfer pricing

Marketplace Staff Sep 15, 2006

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.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.