No, it doesn't have to be "reasonable". Its only illegal if it is used to cover up some other illegal thing.

For example giving huge discounts below cost only to family members, which is more or less like paying them money without paying taxes for it.

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Flundstrom2 35 minutes ago | parent | next [-]

It might be legal in YOUR jurisdiction, but at least in the jurisdiction I'm in, it is not - AFAIK - legal to neither underwrite or overwrite costs on the sole purpose of avoiding tax or grooming the pig.

	▲	andix 30 minutes ago \| parent [-]
		> on the sole purpose of avoiding tax or grooming the pig Exactly. But it doesn't have to be used in this way.

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thih9 an hour ago | parent | prev [-]

Note that we’re talking about two companies exchanging services.

When two companies undervalue the services that they offer to each other, they pay lower taxes. This is the illegal part.

	▲	tstenner an hour ago \| parent [-]
		If the expense is tax deductable, it mostly doesn't matter whether you have $10 earnings vs $10 business expenses or $10K.