Profit shifting (transfer of profits)

Unless otherwise defined, the allocation of profits earned by one company to another domestic or foreign company. In most cases, this involves internal financing. Funds are transferred from a parent company to a subsidiary or vice versa. – See group, zero distribution, cross-subsidization, self-financing. – Cf. Deutsche Bundesbank Monthly Report, January 2012, p. 19 (foreign subsidiaries of German companies are provided with capital).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
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