Corporate tax avoidance: The price isn’t right | The Economist

Corporate tax avoidance: The price isn’t right | The Economist: "Tax avoidance, unlike tax evasion, is legal. But many large companies push into legal grey areas with aggressive strategies designed to increase “tax efficiency”. A common way to move profits offshore is through transfer pricing, when subsidiaries in different countries charge each other for goods or services “sold” within the group. This is particularly popular among technology and drug companies that have lots of intellectual property, the value of which is especially subjective. These intra-company royalty transactions are supposed to be arm’s-length, but are often priced to minimise profits in high-tax countries and maximise them in low-tax ones."

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