Final answer:
Transfer pricing is an important topic in global marketing because it involves the pricing of goods crossing national borders. It is of interest to governments, who want to collect income taxes, and to countries, which want to collect appropriate duties on goods.
Step-by-step explanation:
Transfer pricing is an important topic in global marketing because goods crossing national borders represent a sale; therefore, their pricing is a matter of interest both to the governments, who want to collect a fair share of income taxes, and to the countries, which wants to collect an appropriate duty on the goods.
When goods move across national borders, governments are concerned with ensuring that they can collect the necessary taxes and duties. They want to ensure that the income taxes and duties are collected fairly and that they reflect the actual value of the goods being traded.
For example, if a company in one country sells goods to a company in another country at an artificially low price, they may be underreporting their income and avoiding paying the appropriate income taxes in their home country. This can lead to a loss of tax revenue for the government. Similarly, if a company imports goods into a country at an artificially low price to avoid paying higher import duties, it can lead to a loss of revenue for the importing country.