Transfer pricing refers to the setting of prices for goods and services that are exchanged between two related companies, typically located in different countries. This practice is important for multinational corporations like those operating in Pakistan, as it affects how profits are allocated among different parts of the company and can have tax implications.
When it comes to managing costs within a business, overhead costs play a significant role in determining the overall financial health of the organization. Overhead costs refer to the ongoing expenses incurred by a business that are not directly tied to the production of goods or services. These costs can include rent, utilities, administrative salaries, office supplies, and other expenses necessary to keep the business running smoothly.