Recommend one policy change that ensures both goal congruence and tax compliance.
CA Final · Integrated Business Solutions (Multidisciplinary Case Study) · MTP · May 2026
Recommend one policy change that ensures both goal congruence and tax compliance.
Suggested Answer and Working Notes:
Recommended Policy: To adopt a Dual-Rate Transfer-Pricing System: RD credited at market-based price (reflecting opportunity cost).CD charged at variable cost (150) . Head office adjusts the difference centrally. This would ensure tax compliance, preserve autonomy, and maximise group after-tax profit.
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