TRANSFER PRICES: PREREQUISITES FOR USE IN MANAGEMENT ACCOUNTING AND TAX ADMINISTRATION
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Keywords:
transfer pricing, management accounting, tax control, domestic business operations, international business.Abstract
Today, the issues of transfer pricing come to the fore in the ranking of current problems of tax administration not only in Ukraine but also in the world as a whole. This is due to the need for tax control to ensure price equality between related and independent entities in international business as a measure to combat the erosion of the tax base and the withdrawal of profits from taxation. The article presents a structured analysis of research by foreign and domestic scientists on transfer pricing in the field of management accounting or tax control. In particular, the grouping of views of scientists and practitioners on the nature and role in the accounting and analytical system of transfer pricing from the point of view of management accounting and tax administration. Study of the impact on the practice of transfer pricing methods of the picture of economic reality distorted by the negative impact of the COVID-19 pandemic. The need to use the transfer pricing mechanism in management accounting is due to the current trend of decentralization of management, and a prerequisite - the desire of top management to accelerate the production process, accelerate the turnover of equity and maximize profits. The advantages of using transfer pricing in management accounting to accelerate the production process and maximize profits, which led to the creation of corporations with the final technological cycle. It is also established that when deciding on the use of such a tool of internal pricing, one should keep in mind the cautions analyzed in the article. The preconditions for the introduction of tax control over transfer pricing in international business, as well as the basic laws and regulations in force in the global and Ukrainian economic space. The necessity and validity of the application of the OECD International Guidelines on Transfer Pricing, despite the provisions of Art. 39 of the Tax Code of Ukraine The ways of further development of tax control over transfer pricing within the framework of the BEPS Action Plan in Ukraine are considered. The need for further research on solving the problems of transfer pricing in the field of management accounting and taxation was identified, especially on the preparation of an information basis to justify the compliance of transfer prices with «Arm’s length principle».
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