Re: why not
You can't do that - it lead to a whole bunch of undesirable consequences.
Company A develops software in the US. Company B (its subsidiary) sells that software in the UK. Company B needs to pay a licence fee to A otherwise A doesn't have any revenue to pay its costs.
In your world A is going to make a loss in the US, whilst B makes an unrealistic profit in the UK - because now its cost of goods becomes close to zero. B will pay a stack of tax but A will not pay any tax - but will also not have any income to offset their losses.
Transfer pricing is very heavily regulated anyway - calculating and managing it represents a significant cost to do business.
Biting the hand that feeds IT
