TRANSFER PRICING IN THE SYSTEM OF TAX POLICY PRIORITIES
Abstract
The article is devoted to the problems of transfer pricing in the system of tax policy priorities. The essence of transfer pricing as a mechanism of the enterprise’s strategic management and the specific features of a controlled transactions were highlighted. Transfer pricing was identified as specific methods and rules for pricing transactions within and / or between business entities under common ownership or control. Regarding the fact that multinational enterprises could reduce their global tax payments by shifting income from highly taxed jurisdictions to more lightly taxed ones, the fiscal institutions’ aims and objectives associated with the counteraction of base erosion were outlined. Regarding the peculiarities of Ukrainian tax legislation, the most common taxpayers’ fiscal discipline violations were identified and systematized. The need to improve the enterprises’ risk management system was substantiated. The necessity of advance pricing arrangements between the taxpayers and fiscal institutions was argued. The aforementioned arrangements should cover the issues of the appropriate transfer pricing method’s selection and application, acceptable for both the taxpayers and fiscal authorities. It was proved that transfer pricing mechanism could be considered as a means to accomplish corporate objectives and create strategic consequences simultaneously. The methods of transfer prices manipulation’s influence on the relative tax burdens (multinational firms were facing in their countries of operation) were analyzed and systematized. The changes in the tariffs levied on intra-company imports (triggered by transfer price manipulations) were investigated. Additionally, the base erosion and profit shifting action plan’s implementation principles in Ukraine have been defined. The automatic exchange’s of financial information expediency was emphasized. The Common Reporting Standard purpose to combat tax evasion was pointed out. Considering the period from 2013 to 2024, the discipline of Ukrainian taxpayers in carrying out controlled transactions was analyzed.
References
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