TRANSFER PRICING IN TRANSNATIONAL CORPORATIONS: RISKS FOR THE TAX SYSTEM OF UKRAINE AND WAYS TO MINIMIZE THEM

Abstract

In today's global economy, transfer pricing is one of the key topics, because it has a great influence on transnational corporations and affects their activities in various aspects. This type of pricing is an important tool for optimizing tax costs and minimizing tax liabilities for such corporations. By setting internal prices for goods and services between associated companies in different countries, corporations can efficiently allocate profits and taxation bases. Although such a pricing policy is predominantly a legitimate way to minimize the tax burden and does not violate legal norms, improper use of transfer pricing leads to conflicts with the countries where corporations operate, as a result of tax evasion attempts. That is why both national governments and leading international organizations continue to emphasize the ever-growing importance of this topic. The article examines the concepts of transfer pricing and transfer price, examines the tax evasion and profit shifting scheme using transfer pricing, and explores available methods of combating fraudulent schemes in Ukraine in accordance with current legislation. The existing three-level structure of transfer pricing documentation, which was implemented according to BEPS Action 13 in order to control operations within international groups of companies was also considered, and appropriate measures and mechanisms were proposed to strengthen control over the activities of transnational corporations, which would contribute to ensuring tax revenues to the budget and maintaining the stability of the country's financial system as a whole. The following methods of scientific knowledge are used in the work, namely: methods of logical generalization and scientific abstraction, comparative analysis, analysis and synthesis, graphic method, etc. The practical value of the research results lies in the fact that the generalized results of existing and potential threats from the activities of transnational corporations and the available opportunities to avoid them create the basis for further development and improvement of these opportunities.