The issue of transfer pricing in multinational companies assumes strategic importance in modern business conditions. Evaluation of performance and goal congruence of all supsidiaries and multinational companies as a whole are determined by the applied rules and methods of transfer pricing. Determination of transfer pricing in multinational companies has become more complicated with differentiation of the tax systems of the countries in which subsidiaries are located. Due to different tax rates on income, companies transfer their profit from high-tax countries to low-tax countries. According to that, the aim of this work is to indicate the importance of transfer pricing and methods of their determination in multinational companies. During the preparation of this article, analysis methods based on relevant and available foreign literature and practices, methods of synthesis and methods of comparison will be applied. The aim of this paper is to indicate to the domestic and professional public the phenomenon of transfer prices and their implications on the performance of subsidiaries and multinational companies as a whole.