Tax control of transfer pricing

Мельниченко, Руслан; Pugachevska, Kateryna; Kasianok, Kyrylo

doi:10.21511/imfi.14(4).2017.05

Cited by 8 publications

(6 citation statements)

References 6 publications

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“…A similar conclusion is reached by MELNYCHENKO, PUGACHEVSKA and KASIANOK (2017), who argue that the transfer price generated by a multinational company between two units is an economic and legal tool used to optimize the tax burden. LOHSe and RIEDEL (2013) published results of a study assessing the impact of transfer pricing rules on the behavior of multinational companies in intra-group price distortions, where the authors argue that the introduction of certain transfer pricing rules increases the profits that are reflected in the profitability of businesses in high tax jurisdictions, and reduce them in low tax jurisdictions.…”

Section: Literature Reviewsupporting

confidence: 63%

“…Many foreign publications deal with the issues of avoiding taxation through offshore territories by means of transfer pricing mechanisms. The question of transfer pricing control and management in the context of tax optimization was investigated by DEVEREUX and MAFFINI (2007), LOHSE and RIEDEL (2013), MARQUES and PINHO (2015), RUF AND WEICHENRIEDER (2015), HUDA, NUGRAHENI and KAMARUDIN (2017), MELNYCHENKO, PUGACHEVSKA andKASIANOK (2017) PRETTL (2018), BEEBEEJAUN (2019), CLIFFORD (2019), HIRA, MURATA and MONSON (2019).…”

Section: Literature Reviewmentioning

confidence: 99%

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The results of implementation of european requirements in management of transfer pricing audit (experience of Ukraine)

Fesenko

Vakulchyk

Guba

et al. 2020

Ind. Jour. Manag. & Prod.

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Since 2017 four of fifteen steps of the BEPS plan (base erosion and profit shifting) have been introduced in Ukraine to resist various areas of aggressive tax planning. The implementation of the BEPS plan is primarily made through frame working a transfer pricing control system in Ukraine, which aims to reduce illegal tax sheltering through foreign economic transactions with interdependent or interested parties as well as through transactions with contractors that are registered or make business in low-tax jurisdictions. The purpose of this study is to evaluate the results of implementation of European requirements in the system of audit of foreign economic activity in Ukraine. The study is based on data from the State Statistics Committee of Ukraine, the State Fiscal Service of Ukraine for 2015-2019.The article identifies the amounts of Ukrainian exports (imports) to (from) low-tax jurisdictions, analyzes the controlled exports and imports by geographical segment. The study presents evidence of the use of transfer pricing mechanisms by Ukrainian companies to optimize income taxation, which is contrary to the interests of the state. Therefore, a special need consists in improvement of the state control over operations of the foreign economic activity. The changes and current trends in foreign economic operations during the implementation of transfer pricing controls since 2013 in accordance with the BEPS plan were examined. This study proves that immediately after expanding the list of low tax jurisdictions, there has been a significant fall in the volume of controlled exports and imports, which we regard as a loss of cost-effectiveness of trade operations through low tax jurisdictions due to increased controls and enlarged list of territories, transactions through which are under strict control.

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Section: Literature Reviewsupporting

confidence: 63%

Section: Literature Reviewmentioning

confidence: 99%

The results of implementation of european requirements in management of transfer pricing audit (experience of Ukraine)

Fesenko

Vakulchyk

Guba

et al. 2020

Ind. Jour. Manag. & Prod.

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“…In some jurisdictions, companies that manipulate transfer pricing to shift profits may lose access to tax incentives, deductions, and benefits that are intended to promote legitimate business activities and economic growth (Melnychenko, Pugachevska, Kasianok, 2017).…”

Section: Loss Of Benefits and Incentivesmentioning

confidence: 99%

Contemporary Technologies and Society: Innovations, Artificial Intelligence, and Challenges

2023

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The collective monograph elucidates the trends in the formation and development of the digital society in the 21st century, and the role of information and communication technologies therein. Presently, information and innovative technologies are shaping more efficient management mechanisms, expanding access to healthcare, education, science, culture, and banking, enhancing the quality of public services, and broadening communication and information access capabilities.The research findings presented in the monograph underscore the significance and necessity of digital technologies for the welfare of the population and economic development. Today, information and innovative technologies are integrated into business processes across virtually all spheres of activity, as they enhance decision-making efficiency. Information technologies enable any activity to be conducted online, facilitating solutions to social issues by easing access to education through remote learning, local government services through e-governance, electronic registration systems, medical services via digital health systems, and the provision of electronic financial and banking services.The first chapter of the monograph analyses the current state and prospects of using information and innovative technologies in education, presents research results on the application of artificial intelligence, machine learning, nanotechnologies, and virtual reality in higher education training. It also highlights the nuances of developing digital competencies among schoolchildren and students.The second chapter is dedicated to the application of information and innovative technologies in economics and management, examining their impact on the economy of the information society. The digital economy is grounded on information and communication technologies that facilitate ecommerce through the operation of electronic digital devices, tools, and automated systems.The third chapter contemplates the theoretical concepts of employing information and innovative technologies in society at large, considering their influence in fields such as ecology, social issues, psychology, and professional adaptation to digital existence.The fourth chapter is devoted to the utilization of artificial intelligence, studying its societal impact and evaluating potential opportunities and risks. Particular attention is given to the status and prospects of artificial intelligence in education, manufacturing, medical fields, and the development of communicative competencies.The fifth chapter of the monograph focuses on contemporary technologies in physical education, sports, and physical rehabilitation, which are paramount in the context of ensuring effective approaches to physical development, rehabilitation, and fostering a healthy lifestyle approach.

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“…The affiliates tend to collude instead of competing in their profit generation endeavours as well as in their pricing decisions, thereby over or under-invoicing to reduce the tax burden or avoid it in some countries through "profit maximising transfer pricing" (Reuter, 2012, p. 213). Melnychenko, Pugachevska and Kasianok (2017) while focusing on TP in Ukraine, concluded that TP was not merely exploited through tax planning to achieve tax avoidance, but it can be used for outright tax evasion. The researchers highlighted three scenarios of outright tax evasion: (1) the use of fictitious or "pseudo imports" and these imports are at higher prices and exports at lower prices (2) the generation of baseless value added tax (VAT) credits and illegal VAT offset and evasion using "pseudo or non-typical exports" and pricing them highly (3) the use of fictitious companies.…”

Section: Income Shifting Through Under or Over-invoicingmentioning

confidence: 99%

An exposition of transfer pricing motives, strategies and their implementation in tax avoidance by MNEs in developing countries

Mpofu

Mashiri²,

Schwartz

2021

Cogent Business & Management

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The abuse of transfer pricing by multinational enterprises (MNEs) is a topical issue the world over. Abusive transfer pricing results in the erosion of tax bases and profit shifting from countries with high tax rates to those with lower tax rates, thus enabling tax avoidance and evasion. Developing countries are argued to suffer most under the negative impacts of transfer pricing manipulation. This study investigates the strategies employed by MNEs to minimise their tax burden in developing countries. An understanding of the motives and strategies is fundamental in tax policy crafting and improvements that effectively respond to transfer pricing. Adopting the interpretivist research philosophy with the use of in-depth interviews with tax officers, tax consultants and Ministry of Finance Officials, the study established that amongst the transfer pricing schemes used by MNEs in Zimbabwe, the predominant one was the use of service fees. The most notable being management fees, this was a contribution to knowledge as this strategy was found to be scarcely discussed in literature and there was very little empirical evidence to back its existence. The study recommended use of targeted approaches by the revenue authority to minimise revenue losses through intragroup services.The findings serve as vital information for policymakers, revenue authorities and tax auditors.

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Tax control of transfer pricing

Abstract: The subject of the scientific work is analysis of the essence of the "transfer pricing" concept. It has been proven that transfer pricing is an economic and legal tool used by business entities for their tax burden optimization.

Cited by 8 publications

References 6 publications

The results of implementation of european requirements in management of transfer pricing audit (experience of Ukraine)

The results of implementation of european requirements in management of transfer pricing audit (experience of Ukraine)

Contemporary Technologies and Society: Innovations, Artificial Intelligence, and Challenges

An exposition of transfer pricing motives, strategies and their implementation in tax avoidance by MNEs in developing countries

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