Проводимо набір статей до публікації у науковому фаховому журналі
"Зовнішня торгівля: економіка, фінанси, право" з економічних та юридичних наук 

Cite as APA style citation
Hladii I. Transfer pricing of transnational corporations. Zovnishnja torgivlja: ekonomika, finansy, pravo. 2021. № 3. S. 85-97. Serija. Ekonomichni nauky.

 FREE FULL TEXT (PDF)

UDC 336.56:339.92   DOI: https://doi.org/10.31617/zt.knute.2021(116)08
   
JEL Classification М40    
   
HLADIY Iryna  
 
 
E-mail: Ця електронна адреса захищена від спам-ботів. вам потрібно увімкнути JavaScript, щоб побачити її.   
ORCID: 0000-0001-9845-9706  
Candidate of Sciences (Economics), Associate Professor at the Department of Accounting and Taxation, Vinnytsia Institute of Trade and Economics
Kyiv National University of Trade and Economics
87, Soborna str., Vinnytsia, 21000, Ukraine

TRANSFER PRICING OF TRANSNATIONAL CORPORATIONS

Background. In the context of globalization, transnational corporations have turned into highly concentrated points of the world economy and the principal markets for goods and services. It is under such conditions that a comprehensive research of the pricing system within the framework of their activities is relevant.
Analysis of recent research and publications has revealed that the process of setting prices for products within their activities in different countries and the development of innovations in domestic legislation require in-depth study.
The aim of the article was to study possible transfer pricing systems for TNCs in order to eliminate risks when calculating the exact cost of products and avoid possible situations of non-payment of due taxes.
Materials and methods. A set of general scientific methods of cognition is applied: inductive, deductive, system analysis, theoretical generalization, formal-logical, analysis and synthesis.
Results. The transfer pricing system is becoming the key direction in the process of planning and profit maximization. The methods of setting the transfer price are legally enshrined in the current Tax Code of Ukraine. However, the use of these methods is a top priority for checking compliance with the «arm’s length»principle. It is determined that in order to comply with this principle, it is necessary to compare controlled and uncontrolled transactions, based on the criterion of tax benefits, as well as to analyse all the advantages and disadvantages that they create.
Conclusion. The issue of proper transfer pricing plays a leading role in the export or import of goods. Particular attention should be paid to the sources of information indicated by taxpayers and used in order to ensure compliance with the requirements for justification in the documentation on transfer pricing compliance with the conditions of controlled transactions with the arm’s length principle.
Prospects for further research are to provide practical recommendations for compliance of the legal and regulatory framework for transfer pricing with the requirements of the world economy in the direction of preventing the implementation of tax avoidance schemes.

Keywords: transfer pricing, transnational corporations, OECD Guidelines, the arm’s length principle, the comparable uncontrolled price method, controlled transactions. 

REFERENCES

  1. Blouin, J., & Robinson, L. (2020). Double Counting Accounting: How Much Profit of Multinational Enterprises Is Really in Tax Havens?Retrieved from https://ssrn.com/abstract=3491451.DOI:10.2139/ssrn.3491451 [in English] https://doi.org/10.2139/ssrn.3491451.
  2. Stringer, C., & Michailova, S. (2018). Why modern slavery thrives in multinational corporations’ global value chains. Multinational Business Review. (Vol. 26), 3, 194-206.DOI:10.1108/MBR-04-2018-0032 [in English] https://doi.org/10.1108/MBR-04-2018-0032.
  3. Pham, H. T. S., & Tran, H. T. (2019). Board and corporate social responsibility disclosure of multinational corporations. Multinational Business Review. (Vol. 27), 1,77-98. DOI:10.1108/MBR-11-2017-0084 [in English] https://doi.org/10.1108/MBR-11-2017-0084.
  4. Clausing, K. (2009). Multinational Firm Tax Avoidance and Tax Policy. National Tax Journal, (Vol. 62), (Issue 4), (pp. 703-725) [in English]. https://doi.org/10.17310/ntj.2009.4.06
  5. West, A. (2018). Multinational Tax Avoidance: Virtue Ethics and the Role of Accountants. Journal of Business Ethics, 153, 1143-1156. DOI:10.1007/s10551-016-3428-8 [in English] https://doi.org/10.1007/s10551-016-3428-8.
  6. Ferraris, A., Santoro, G., & Scuotto, V. (2018). Dual relational embeddedness and knowledge transfer in European multinational corporations and subsidiaries. Journal of Knowledge Management, (Vol. 24), 3, 519-533. DOI:10.1108/JKM-09-2017-0407 [in English] https://doi.org/10.1108/JKM-09-2017-0407.
  7. Korogodova, O. O. (2018). Vplyv innovacijnyh transnacional'nyh struktur na krai'ny, shho rozvyvajut'sja, v umovah industrii' 4.0 [The impact of innovative transnational structures on developing countries in the context of Industry 4.0]. Pidpryjemnyctvo ta innovacii' – Entrepreneurship and innovations, 6, 125-129. Retrieved from http://ei-journal.in.ua/index.php/journal/article/view/155/141 [in Ukrainian].
  8. Voloshko, N. O. (2020). Transnacional'ni korporacii': teoretyko-metodologichni osnovy organizacii' dijal'nosti v umovah globalizacii' ekonomiky [Transnational corporations: theoretical and methodological foundations of the organization of activity in the context of economic globalization]. Ekonomika ta derzhava – Economyand state, 7, 110-113. DOI: 10.32702/2306-6806.2020.7.110 [in Ukrainian] https://doi.org/10.32702/2306-6806.2020.7.110.
  9. Nemyrovs'ka, O. V. (2015). Mehanizm reguljuvannja vzajemodii' nacional'noi' ekonomiky z transnacional'nymy korporacijamy [Mechanism for regulating the interaction of the national economy with transnational corporations]. Ekonomika ta derzhava – Economy and state, 12, 121-125 [in Ukrainian].
  10. P’jatnyc'ka, G. (2017). Internalizacija torgovel'nyh merezh [Internalization of trade networks]. Zovnishnja torgivlja: ekonomika, finansy, pravo. Serija: Ekonomichni nauky – Foreign trade: economics, finance, law. Series: Economic Sciences, 4, 28-46 [in Ukrainian].
  11. Soroka, I. B. (2009). Transnacional'ni korporacii' ta i'hnja rol' u procesi aktyvizacii' mizhnarodnoi' integracii' – [Transnational corporations and their role in the process of intensifying international integration]. Aktual'ni problemy ekonomiky – Current economic problems, 9, 35-41 [in Ukrainian].
  12. Skil'ky zarobljajut' velyki korporacii' v Ukrai'ni ta de trymajut' zaroblene [How much do large corporations earn in Ukraine and where do they keep their earnings]. (2020). Minfin – Ministry of Finance. Retrieved from https://minfin.com.ua/ua/2020/09/15/52326392 [in Ukrainian].
  13. Global 2000. The World Largest Public Companies. Forbes. (2020). Retrieved from https://www.forbes.com/ global2000/#4864a1ba335d [in English].
  14. Krylova, E. M. (2020). Transnacional'nye korporacii: sovremennye cherty i napravlenijarazvitija [Transnational corporations: modern features and directions of development]. Aktual'nye issledovanija –Current research, 13(16), 54-56. Retrieved from https://apni.ru/article/1015-transnatsionalnie-korporatsii-sovremennie [in Russian].
  15. Sikka, Prem, & Willmott, Hugh. (2010). The dark side of transfer pricing: Its role in tax avoidance and wealth retentiveness. Critical Perspectives on Accounting, 21, 342-356. Retrieved from https://www.researchgate.net/ publication/222406910_The_dark_side_of_transfer_pricing_Its_role_in_tax_avoidance_and_wealth_retentiveness [in English] https://doi.org/10.1016/j.cpa.2010.02.004.
  16. Hines, Jr. J. R., & Rice, E. M. (1994). Fiscal Paradise: Foreign Tax Havens and American Business. Quarterly Journal of Economics. (Vol. 109). (Issue 1), (pp. 149-182). Retrieved from https://econpapers.repec.org/article/ oupqjecon/v_3a109_3ay_3a1994_3ai_3a1_3ap_3a149-182.htm [in English] https://doi.org/10.2307/2118431.
  17. Najbil'shi investory v ekonomiku Ukrai'ny. [The largest investors in the economy of Ukraine]. DP «Derzhzovnishinform» – SE «Derzhzovnishinform». Retrieved from https://dzi.gov.ua/press-centre/news/ najbilshi-investory-v-ekonomiku-ukrayiny [in Ukrainian].
  18. Antologija ofshoriv: putivnyk po ukrai'ns'kij ofshornij pavutyni[Anthology of offshores: a guide to the Ukrainian offshore web]. Retrieved from https://voxukraine.org/longreads/panama/index_ua.html [in Ukrainian].
  19. Nastanovy OESR shhodo transfertnogo cinoutvorennja dlja transnacional'nyh pidpryjemstv ta podatkovyh administracij [OECD Transfer Pricing Guidelines for Transnational Enterprises and Tax Administrations]. (2017). Retrieved from https://read.oecd-ilibrary.org/taxation/oecd-transfer-pricing-guidelines-for-multinational- enterprises-and-tax-administrations-2017_tpg-2017-en#page4 [in Ukrainian].
  20. Lyst DFS vid 15.08.2017 № 1615/6/99-99-15-02-02-15/IPK [Letter of the SFS dated 15.08.2017 № 1615/6 / 99-99-15-02-02-15 / IPK]. Derzhavna fiskal'na sluzhba Ukrai'ny – State Fiscal Service of Ukraine. Retrieved from http://sfs.gov.ua/baneryi/ podatkovi-konsultatsii/konsultatsii-dlya-yuridichnih-osib/print-72424.html [in Ukrainian].
  21. Postanova Kabinetu Ministriv Ukrai'ny vid 09.12.2020 № 1221 Pro zatverdzhennja pereliku syrovynnyh tovariv ta vyznannja takoju, shho vtratyla chynnist', postanovy Kabinetu Ministriv Ukrai'ny vid 8 veresnja 2016 r. № 616 [Resolution of the Cabinet of Ministers of Ukraine dated 09.12.2020 № 1221 On approval of the list of raw materials and recognition as invalid, Resolution of the Cabinet of Ministers of Ukraine dated September 8, 2016 № 616]. Zakonodavstvo Ukrai'ny. Verhovna rada Ukrai'ny – Legislation of Ukraine. Verkhovna Rada of Ukraine. Retrieved from https://zakon.rada.gov.ua/laws/show/1221-2020-%D0 %BF#Text [in Ukrainian].
  22. Podatkovyj kodeks Ukrai'ny vid 02.12.2010 № 2755-VI (zi zminamy) [Tax Code of Ukraine dated 02.12.2010    № 2755-VI (as amended)]. Zakonodavstvo Ukrai'ny. Verhovna rada Ukrai'ny – Legislation of Ukraine. Verkhovna Rada of Ukraine. Retrieved from https://zakon.rada.gov.ua/laws/show/2755-17#Text [in Ukrainian].
  23. Postanova Kabinetu Ministriv Ukrai'ny vid 27 grudnja 2017 r. № 1045 Pro zatverdzhennja pereliku derzhav (terytorij), jaki vidpovidajut' kryterijam, ustanovlenym pidpunktom 39.2.1.2 pidpunktu 39.2.1 punktu 39.2 statti 39 Podatkovogo kodeksu Ukrai'ny, ta vyznannja takym, shho vtratylo chynnist', rozporjadzhennja Kabinetu Ministriv Ukrai'ny vid 16 veresnja 2015 r. № 977 [Resolution of the Cabinet of Ministers of Ukraine of December 27, 2017 № 1045 On approval of the list of states (territories) that meet the criteria established by subparagraph 39.2.1.2 of subparagraph 39.2.1 of paragraph 39.2 of Article 39 of the Tax Code of Ukraine, and recognition as invalid, the order of Cabinet of Ministers of Ukraine of September 16, 2015 № 977]. Zakonodavstvo Ukrai'ny. Verhovna rada Ukrai'ny – Legislation of Ukraine. Verkhovna Rada of Ukraine. Retrieved from https://zakon.rada.gov.ua/laws/show/1045-2017-%D0%BF#Text [in Ukrainian].