What does transfer pricing primarily concern?

Transfer pricing primarily concerns the pricing of goods, services, and intangibles between related entities within a multinational corporation, particularly in the context of tax regulations. It plays a crucial role in determining how profits are allocated across different jurisdictions to comply with local laws and regulations.

Tax authorities closely monitor transfer pricing to ensure that transactions between related parties are conducted at arm's length, which means the prices should be consistent with those that would be charged between unrelated parties under similar circumstances. This ensures fairness in tax contributions across different countries where the entities operate, as it prevents profit shifting to low-tax jurisdictions.

In contrast, the other options do not capture this core focus of transfer pricing. Shipping costs relate to the logistics of moving goods rather than the internal pricing mechanisms. Standard pricing strategies in export markets pertain to broader competitive and market conditions rather than the specific regulatory implications of intra-company pricing. Lastly, contract negotiations between buyers and sellers primarily deal with the agreement terms rather than the specific financial implications tied to taxation and pricing strategy among related entities.