# Product pricing strategies for tax avoidance by multinational companies Multinational companies usually use the following methods related to product pricing to avoid taxes： ##Transfer pricing mechanism -**High and low price regulation**: Sell goods at low prices/purchase at high prices to affiliated companies in low-tax countries, and transfer profits to low-tax areas -**Royalties**: Pay excessive intellectual property fees to affiliated companies in low-tax areas in high-tax countries -**Management service fee**: Pay management and consulting fees to the parent company or affiliated company in the low-tax area that may exceed the actual value ## Specific means of operation -**Differential pricing**: The same product adopts different price systems in different countries -**Cost sharing arrangements**: Allocate R&D and other costs to entities in high-tax countries -**Use of intangible assets**: Place high-value patents and intellectual property rights in the name of entities in low-tax areas These practices have attracted the attention of the international community. Tax agencies of various countries are paying more and more attention to the "principle of independent transactions", which requires that the transaction prices between affiliated companies should be comparable to the market prices between non-affiliated parties.