American Apparel uses transfer pricing to cut effective tax rate
March 25, 2009
American Apparel has told investors that its effective tax rate decreased in the fourth quarter of 2008 because of changes to its transfer pricing policy
The company’s results indicate that it allocated more profit to the US, rather than elsewhere in the group. “Last year there was a lot of pressure regarding transfer pricing in the US, as some thought companies had been escaping tax. I would be surprised if this was done without some coercion,” said a transfer pricing specialist.
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