scholarly journals INTERNATIONAL BUSINESS IN UKRAINE: TAX COMPONENT

2021 ◽  
pp. 46-49
Author(s):  
Ірина Береза ◽  
Володимир Соколенко
Keyword(s):  
International Business ◽  
Transfer Pricing ◽  
Action Plan ◽  
Market Mechanism ◽  
Tax Legislation ◽  
Pricing Rules ◽  
Economic Interaction ◽  
Effective Level ◽  
National Tax ◽  
Thin Capitalization

In the system of regulation of international business, the tax component is of exceptional importance. The development of business is largely dependent on tax policy tools, the actual task of which is to create an optimal tax field in Ukraine, for the development of an open national economic system. The article is devoted to the study of theoretical and practical tax aspects in the international business of Ukraine. Effective level and taxation regime helps to attract foreign capital, develop international business, increase state revenues and increase gross domestic product of the country. The factors hindering the process of investing in our country are considered. The problems, as well as ways of their solution, concerning the tax component of Ukrainian business are analyzed. Detailed attention is focused on some tax aspects, which primarily include: transfer pricing rules, the rule of "thin capitalization", the rules of reporting of international groups of companies by country. Essential characteristics, features and rules of transfer pricing and "thin capitalization" are highlighted. The actions on the BEPS Action Plan are considered, which propose to eliminate the shortcomings of international tax regulation and differences in the national tax legislation of different countries, which promote "concealment" of corporate profits and its artificial transfer to low tax jurisdictions, where companies are no longer engaged in economic activity. The proposals on the improvement of bills that will recognize Ukraine as a cooperating country on taxation issues have been formed. These bills will make it possible to strengthen the economic link between Ukraine and the countries of the CIS and Eastern Europe. Recovering and strengthening these ties is the easiest to date, as each party feels that need. Right now Ukraine is taking measures for their restoration on the basis of an effective market mechanism of economic interaction.

scholarly journals The Main Stages of Normative Regulation of Financial Control Over Transfer Pricing in Ukraine

2021 ◽  
Vol 4 (519) ◽  
pp. 196-204
Author(s):  
M. O. Kuzheliev ◽  
◽  
I. M. Syvolap ◽  
Keyword(s):  
Transfer Pricing ◽  
National Level ◽  
Financial Control ◽  
National Legislation ◽  
Tax Legislation ◽  
Pricing Rules ◽  
Arm’S Length Principle ◽  
Constant Change ◽  
Business Entities ◽  
Stage 1

Any activity is carried out in accordance with what laws and regulations are interpreted at the national level, and often with the direct consent o n the part of the State authorities. In Ukraine, the process of forming the normative regulation for control over transfer pricing is still underway, but conceptually it is already possible to define four main stages. Stage 1 (zero stage): 2010–2013 – in the national legislation were no definitions of controlled operations and transfer pricing, but the concept of ordinary price was widely used, and the tax legislation began to distinguish the methods for its determination and the procedure for application). Stage 2 (baseline stage): 2013–2014 – a significant transformation of tax legislation took place – transfer pricing was introduced in Ukraine. Stage 3 (crucial stage): 2015–2019 – the «arm’s length principle» was introduced, which was wider than the concept of «ordinary price», and relations between business entities were now evaluated not only at the price of transactions performed, but under the conditions of such operations. Stage 4 (renewal stage): 2020–2021 – transfer pricing rules were updated: new concepts were introduced into the national legislation – international group of companies, the group’s parent company, authorized participant; a three-level transfer pricing reporting model was implemented. Thus, Ukraine undergoes a constant change of national legislation, in particular in the normative regulation of financial control over transfer pricing, which for 10 years has been transformed from control over ordinary prices in the country to control over transactions of international groups of companies whose participants are residents of Ukraine.

scholarly journals TRANSFER PRICES: PREREQUISITES FOR USE IN MANAGEMENT ACCOUNTING AND TAX ADMINISTRATION

2021 ◽  
Vol 2 (162) ◽  
pp. 71-77
Author(s):  
O. Vlasova
Keyword(s):  
Production Process ◽  
International Business ◽  
Negative Impact ◽  
Management Accounting ◽  
Transfer Pricing ◽  
Action Plan ◽  
Current Trend ◽  
Tax Administration ◽  
Transfer Prices ◽  
The Impact

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».

scholarly journals Implementation of step 13 of the BEPS Action Plan in the context of introducing automatic exchange of information for tax purposes

2021 ◽  
Vol 2021 (10) ◽  
pp. 41-47
Author(s):  
Yana OLIYNYK ◽  
Keyword(s):  
Multinational Enterprises ◽  
Transfer Pricing ◽  
Action Plan ◽  
International Exchange ◽  
Appropriate Use ◽  
International Group ◽  
Exchange Of Information ◽  
Multilateral Agreement ◽  
Tax Legislation ◽  
Model Action

The precondition for Ukraine's accession to the multilateral agreement on automatic exchange of interstate reports is the introduction of the Report by countries of the international group of companies (hereinafter - the intercountry report), which is part of the OECD-recommended three-tier transfer pricing documentation model (Action Plan 13, BEPS Action Plan 13). It has been proven that the implementation of the intercountry report is in the early stages of the implementation of Step 13(tax legislation establishes the obligation of multinational enterprises to submit such reports; the form and procedure for its preparation are designed , but there is no mechanism for ensuring confidentiality and appropriate use of information of such reports). The conclusion is made on the need to further improve the legislation of Ukraine in the field of international exchange of information for tax purposes and the relevance of research on these issues.

scholarly journals CONTROLLED TRANSACTIONS WITH INTANGIBLE ASSETS IN THE CONTEXT OF THE BEPS ACTION PLAN

2021 ◽  
Vol 135 (1) ◽  
pp. 101-118
Author(s):  
UMANTSIV Halyna ◽  
SHUSHAKOVA Iryna
Keyword(s):  
Intellectual Property ◽  
Scientific Knowledge ◽  
Development Process ◽  
Intangible Assets ◽  
Transfer Pricing ◽  
Action Plan ◽  
Economic Relations ◽  
Business Transactions ◽  
Tax Legislation ◽  
Transfer Prices

Background. The Organization for Economic Co-operation and Development has laun­ched a number of initiatives to solve global tax problem, since there are incon­sistencies and gaps in the international tax legislation. The BEPS Plan is the most signi­ficant of these initiatives. Analysis of recent researches and publications. The review of scientific articles and publications revealed the relevance of the study of the analysis of the conditions of opera­tions controllability with intangible assets and the choice of transfer pricing method through the identification of potential signs of comparability. The aim of the article is to study the approaches to the transfer pricing of intangible assets in the BEPS context in accordance with the concept of their implementation of the "outstretched hand" principle. Materials and methods. Different methods of scientific knowledge such as analysis, synthesis, deduction and induction, as well as methods of comparison, generalization and systematization have been used in the article. Results. Modern tendencies of development of the sphere of intellectual property have been analyzed. The globalization dimension of the processes of intellectual property formation has been studied and the place of Ukraine in these processes is revealed. The main trends of foreign economic transactions with intangible assets are identified. Business transactions with intangible assets for the purposes of transfer pricing are specified. The main measures for the implementation of the BEPS Action Plan in Ukraine are presented. Conclusion. It is identified that the results of comparability of the conditions of the controlled operation, the parties to the controlled operations with intangible assets should receive compensation based on the value they create through the performed functions, used assets and risks assumed in the development process, strengthening, maintenance, pro­tection and use of such assets. This necessitates the formation of approaches to the tax admi­nistration of transfer prices, which will ensure the creation of competitive economic relations, the introduction of clear and transparent mechanisms for determining contract prices. Keywords: transfer pricing, related parties, controlled transactions, BEPS, intangible assets, royalties, international trade in services.

The concept of controlled transactions in the context of transfer pricing

2021 ◽  
pp. 78-84
Author(s):  
Artem Kotenko
Keyword(s):  
Transfer Pricing ◽  
Action Plan ◽  
Main Body ◽  
Association Agreement ◽  
Tax Legislation ◽  
Leading Role ◽  
Complicated Process ◽  
Representative Office ◽  
Problem Setting ◽  
The Eu

Problem setting. Since 2017, Ukraine has joined the International Enhanced Cooperation Program on the Implementation of the BEPS Action Plan and has undertaken obligations under the Association Agreement with the EU to introduce a number of rules, among which transfer pricing occupies a leading role. The legislator defines two types of criteria for determining transactions as controlled, in particular, it is about content and cost criteria. Given that each of these criteria is characterized by a certain peculiarity in practical application, the purpose of the article is to analyze the category of "controlled transactions," as well as the principles that affect the recognition of taxpayer's economic transactions controlled in accordance with the requirements of the current tax legislation. Article’s main body. The article considers the concept of controlled transactions in the context of transfer pricing. Cost and content criteria for determining transactions controlled were analyzed. It is emphasized that by declaring controlled transactions, the permanent representative office should take into account all funds received from a non-resident for the maintenance of such a representative office or transferred by the permanent representative office in favor of residents for the services rendered (performed works) for a non-resident. Conclusions. Taking into account the analysis, we state that in order to recognize the taxpayer's economic transactions as controlled, it is necessary to prove their compliance with the worthwhile and content criteria set by the legislator. At the same time, it should be noted that establishing the conformity of operations with the fixed criteria is a rather complicated process, since each of such regulated criteria (both worth and content) is characterized by a number of features, on some of them we focused our attention in this publication.

scholarly journals Agreements between tax authorities and taxpayers in the context of EU law on state aid

2021 ◽  
Vol 2021 (1) ◽  
pp. 64-82
Author(s):  
Tetiana KOSCHUK ◽  
Keyword(s):  
Transfer Pricing ◽  
State Aid ◽  
The State ◽  
International Treaties ◽  
Legal Compliance ◽  
Tax Legislation ◽  
Compliance Programs ◽  
Pricing Rules ◽  
Agricultural Industries ◽  
Business Entities

This article analyses how the application of the EU legislation on state aid has impacted the development of cooperation between tax authorities and taxpayers through the various forms of agreements they enter into. These measures of tax administration may qualify as state aid to business entities only if they meet all the criteria for such aid, namely: they should offer an economic advantage to the beneficiary; they should be granted by the state or through state resources; they should be selective; they should distort competition and have an adverse impact on trade. Furthermore, there are some areas to which the general rules of state aid do not apply. The latter include, among others, the operations of agricultural industries and the actions the state is obliged to take under international treaties. The analysis of the European Commission's approaches and case law has given rise to the following conclusions: 1) the write-off, instalment and deferral arrangements for the tax debt of insolvent economic entities will qualify for state aid only if it is proven that more funds would have made it into the budget had the corresponding agreements not been in place (in particular, if the taxpayer had gone bankrupt); 2) to recognize the consequences of the violation of transfer pricing rules as state aid when entering into advance pricing agreements, it is crucial to unequivocally prove that tax legislation has been violated and prove that, in view of all other opportunities for taxation under the "standard" conditions, the company has in fact paid less taxes; 3) involvement in joint legal compliance programs will not be considered a provision of state aid if the terms of such cooperation provide only procedural benefits to the parties to the agreements, rather than entailing any reduced tax liability for a business entity.

Category of Market Price in Modern Tax Law

2016 ◽  
Vol 4 (7) ◽  
pp. 0-0
Author(s):  
Инна Хаванова ◽  
Inna Khavanova
Keyword(s):  
Transfer Pricing ◽  
Action Plan ◽  
Market Price ◽  
Profit Shifting ◽  
Complex Issue ◽  
Regulatory Changes ◽  
Pricing Rules ◽  
Arm’S Length Principle ◽  
The Difference ◽  
Correct Application

The article is devoted to transfer pricing rules with particular reference to unresolved problems. Its purpose is to outline the complex issue of transfer pricing. The author examines the difference between the concepts of “market price” and price, determined according to the “arm’s length principle”, discusses the basic rules of taxation, principles of determining the price of goods, work or services for taxation purposes. To ensure the correct application of the separate entity approach, countries have adopted the arm´s length principle. This article analyzes initiatives on taxation in the area of corporate taxation (OECD Action Plan on Base Erosion and Profit Shifting (BEPS), Final Reports “Aligning Transfer Pricing Outcomes with Value Creation”). The author points out that the level of control (direct or indirect) in determining interdependence between persons, has its own specific features in different states. The reason behind it is that the problem of transfer pricing does not always arise, but only when subjects establish specific relations. The article characterizes the regulatory changes and developments in Russia.

TRANSFER FİYATLAMA UYGULAMASININ İŞLETME PERFORMANSINA ETKİSİ VE VERGİSEL AÇIDAN DEĞERLENDİRİLMESİ

2014 ◽  
Vol 1 (2) ◽  
pp. 187
Author(s):  
Serdar KUZU
Keyword(s):  
Business Performance ◽  
Transfer Pricing ◽  
Tax Law ◽  
Economic Activities ◽  
Tax System ◽  
Goods And Services ◽  
Tax Legislation ◽  
International Transactions ◽  
The Cost ◽  
The Impact

The size of international trade continues to extend rapidly from day to day as a result of the globalization process. This situation causes an increase in the economic activities of businesses in the trading area. One of the main objectives of the cost system applied in businesses is to be able to monitor the competitors and the changes that can be occured as a result of the developments in the sector. Thus, making cost accounting that is proper according to IAS / IFRS and tax legislation has become one of the strategic targets of the companies in most countries. In this respect, businesses should form their cost and pricing systems according to new regulations. Transfer pricing practice is usefull in setting the most proper price for goods that are subject to the transaction, in evaluating the performance of the responsibility centers of business, and in determining if the inter-departmental pricing system is consistent with targets of the business. The taxing powers of different countries and also the taxing powers of different institutions in a country did not overlap. Because of this reason, bringing new regulations to the tax system has become essential. The transfer pricing practice that has been incorporated into the Turkish Tax System is one of the these regulations. The transfer pricing practice which includes national and international transactions has been included in the Corporate Tax Law and Income Tax Law. The aim of this study is to analyse the impact of goods and services transfer that will occur between departments of businesses on the responsibility center and business performance, and also the impact of transfer pricing practice on the business performance on the basis of tax-related matters. As a result of the study, it can be said that transfer pricing practice has an impact on business performance in terms of both price and tax-related matters.

Thin Capitalization, Transfer Pricing Aggresiveness, Penghindaran Pajak

2018 ◽  
Vol 2 (1) ◽  
pp. 1-28
Author(s):  
Teza Deasvery Falbo ◽  
Amrie Firmansyah
Keyword(s):  
Regression Analysis ◽  
Linear Regression ◽  
Stock Exchange ◽  
Transfer Pricing ◽  
Linear Regression Analysis ◽  
Tax Avoidance ◽  
Total Sample ◽  
Multiple Linear Regression Analysis ◽  
Tax Revenue ◽  
Thin Capitalization

The increase in tax revenue in Indonesia is not accompanied by an increase in tax ratio The low tax ratioindicatestax avoidance practices in Indonesia. Some tax avoidance practices can be conductedthrough transferpricing and thin capitalization.This study is aimed to examine empirically the effect of thin capitalization as well astransfer pricing aggressiveness on tax avoidance practice in Indonesia. This study uses manufacturing companieswhich are listed on Indonesia Stock Exchange (IDX) within the period 2013-2015. Using purposive sampling, theselected samples in this study are 90 companies, so the total sample is 270 samples. The hypothesis examinationused in this study is multiple linear regression analysis of panel data.The results of this study suggest that thincapitalization is positively associated with tax avoidance,while transfer pricing aggressivenessis not associated withtax avoidance.

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