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The first foreign subsidiary of a small US company: cost-plus transfer pricing, the markup tax offices accept and the yearly paperwork

Why a service subsidiary bills its US parent cost plus a markup: India's published 15.5% safe harbour, Poland's 5% rule that does not cover software development, the Philippines' lack of one, the Form 5471 penalty ($10,000, up to $60,000 a year), local thresholds, and a worked year for a five-person Indian subsidiary with a year-end true-up.

November 8, 2026

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Biz59 LLC is a small company in New York. We build and run eleven products, most of them with one sign-in, and we write about what we see in software, AI and startups.

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