INFLUENCEOFTRANSFERPRICINGONGLOBALSUPPLY CHAINS: CHALLENGES AND OPPORTUNITIES.

Abstract

This studyexamines the criticalrole oftransfer pricing inshaping globalsupplychains, focusing on the challenges and opportunities it presents for multinational corporations. Transfer pricing, the practice ofsetting prices for goods and services exchanged between related entities within an organization, significantly impacts supply chain decisions, tax liabilities, and the overall corporatestrategy. This studyemploys acomprehensive literaturereviewand casestudyanalysis to explore how transfer pricing influences supply chain configuration, location decisions, and operational efficiency. Key challenges identified include regulatory compliance across multiple jurisdictions, the potential for double taxation, and the complexity of aligning transfer pricing with business objectives. Opportunities highlighted include strategic tax planning, improved resource allocation, and enhanced global competitiveness. The study concludes by proposing a framework for integrating transfer pricing considerations into supply chain management, emphasizing the need for a holistic approach that balances tax optimization with operational effectiveness. These findings contribute to the understanding of the multifaceted impact of transfer pricing on global supply chains and offer practical insights for managers navigating this complex landscape.