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.

scholarly journals Financial self-sufficiency of local budgets in the context of realization of financial decentralization reform

2021 ◽  
Vol 2 (99) ◽  
pp. 259-275
Author(s):  
O. V. Rolinskyi ◽  
◽  
B. S. Huzar ◽  
S. A. Ptashnyk
Keyword(s):  
Local Governments ◽  
Action Plan ◽  
Strategic Action ◽  
State Budget ◽  
Economic Relations ◽  
Local Finance ◽  
Finance Management ◽  
Tax Legislation ◽  
Self Sufficiency ◽  
Decentralization Reform

The article highlights the current state of the formation of local budgets in the context of decentralization of financial resources, taking into account the changes made to the budget and tax legislation, the analysis of the revenue and expenditure parts of the local budget is carried out. On the basis of the study, the problems and ways of strengthening the financial base of local self-government bodies have been identified. The main tasks of budget decentralization have been formulated. The sources of filling and problems in the field of formation of local budgets in Ukraine are indicated. According to the Strategic Action Plan of the Ministry of Finance of Ukraine for 2018–2021. the key priorities of Ukraine in the field of public finance management are the efficient execution of budgets and the optimization of resource allocation between the levels of the budgetary system. The fulfillment of these tasks is also the focus of the reform of financial decentralization, which began in Ukraine in 2015 and is aimed at strengthening the financial self-sufficiency of territorial communities. Over the first five years of the implementation of this reform, the share of local bud gets in the consolidated budget of Ukraine has increased from 18.5 % in 2015 to 23.3 % as of June 1, 2020, the share of local budgets' own revenues in GDP – from 5, 1 % to 6.7 % over the same period. However, despite certain positive developments, local budgets are still more than 46 % dependent on transfers from the state budget, which indicates the need for further transformation of the local finance system aimed at strengthening the independence and financial self-sufficiency of local budgets. At the same time, the revealed patterns also indicate the existence of problematic aspects in the formation of the revenue side of local budgets, which actualizes the need to revise the structure of local taxes and fees, as well as the powers of local governments in the field of their appointment, increase deductions from national taxes and fees to local budgets., and, at the same time, popularization of local borrowing and carrying out mass explanatory work on the organizational aspects of this process and optimizing the use of borrowed funds. These measures will increase the level of concentration of funds in local budgets and, accordingly, balance the processes of decentralization of income and expenditure, turning territorial communities into more independent and autonomous participants in budgetary and economic relations.

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».

International Transfer Pricing and Intellectual Property: The PrimeCo Case

2007 ◽  
Vol 22 (4) ◽  
pp. 769-774
Author(s):  
Mark J. Myring ◽  
Robert Bloom
Keyword(s):  
Intellectual Property ◽  
Cell Phone ◽  
Transfer Pricing ◽  
Asia Pacific ◽  
Pacific Region ◽  
Ethical Aspects ◽  
Asia Pacific Region ◽  
Foreign Markets ◽  
Cellular Telephone ◽  
Transfer Prices

This case introduces students to issues related to international transfer pricing for intellectual property. PrimeCo is a manufacturer of cellular telephone (cell phone) components. The firm has invested extensively in research and development activities. As a result, it has received many patents for innovative cell phone parts. PrimeCo recently established a subsidiary (SubCo) to manufacture its products for the Asia-Pacific region. The establishment of SubCo raises many difficult questions. Specifically, students are asked to address issues related to modes of entry into foreign markets, methods of transfer pricing in royalty arrangements, tax laws underlying transfer pricing, and ethical aspects of applying transfer prices.

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 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.

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.

Legal regulation of liability for violation of transfer pricing requirements

2021 ◽  
pp. 85-90
Author(s):  
Kateryna Hetman
Keyword(s):  
Transfer Pricing ◽  
Legal Regulation ◽  
State Regulation ◽  
The State ◽  
Main Body ◽  
State Budget ◽  
Financial Responsibility ◽  
Tax Legislation ◽  
Transfer Prices ◽  
Market Relations

Problem setting. Given that transfer pricing is a rather complex legal phenomenon, its application is characterized by a number of features, in practice there are often violations of tax legislation on transfer formation. Analysis of recent research. It is significant that the legal regulation of liability for violations of tax legislation and transfer pricing have been the subject of research by many scholars, in particular, such as: O. Dmytryk, D. Kobylnik, A. Kotenko, M. Kucheryavenko, O. Makukh, M. Mishin, E. Smychok and others. At the same time, the study of legal regulation of liability for violation of transfer pricing requirements was almost not conducted. In view of the above, the purpose of the article is to study the legal regulation of liability for violation of the requirements of transfer education. Article’s main body. In the article the author analyzes the modern legal regulation of liability for violation of transfer pricing requirements. Emphasis is placed on the need to improve the updated concept of financial responsibility by consolidating negligence as a possible form of guilt in tax offenses, determining the content of the assessment categories. Conclusions. It is noted that the state regulation of transfer pricing should be aimed not only at resolving issues of replenishment of the state budget by increasing tax revenues by reducing "loopholes" in the form of transfer prices, but also to maintain market relations and improve the efficiency of companies and their divisions.

Multinational transfer pricing of intangible assets: Indonesian tax auditors’ perspectives

2016 ◽  
Vol 24 (3) ◽  
pp. 313-337 ◽  
Author(s):  
Abdul Haris Muhammadi ◽  
Zahir Ahmed ◽  
Ahsan Habib
Keyword(s):  
Design Methodology ◽  
Intangible Assets ◽  
Transfer Pricing ◽  
Research Question ◽  
Legal Basis ◽  
Policy Makers ◽  
Content Type ◽  
Transfer Prices ◽  
Tax Audit

Purpose The purpose of this paper is to examine the challenges faced by Indonesian tax auditors in auditing multinational transfer prices of intangible assets. This study then explores the suitability of mechanisms currently used by Indonesian tax auditors to ensure appropriate tax audit adjustments. Design/methodology/approach The authors use a qualitative research method involving semi-structured and open-ended interviews with the tax auditors in Indonesia. The authors also include some Indonesia court decisions pertinent to the research question above. Findings Findings indicate that Indonesian tax auditors face a number of difficulties during the audit of transfer pricing cases derived from intangible property, including a lack of transparency in taxpayers’ bookkeeping; limited taxpayer cooperation in providing data and documents; transfer pricing regulations; and problems related to organization and human resources. The study also finds that Indonesian tax auditors and tax officials handle transfer pricing cases by using a legal basis as reference and by performing a number of activities, including among others, comparable analysis. Originality/value The findings of this study should assist policy makers to improve the quality of transfer pricing audit. Also, tax auditors and account representatives who do not have enough experience in auditing transfer pricing cases derived from intangible property rights might use the outcomes of this study as a guide for dealing with those cases.

scholarly journals Capitalization of Enterprises: The Theoretical and Practical Aspects of the Status and Process of Development

2021 ◽  
Vol 10 (525) ◽  
pp. 273-283
Author(s):  
O. M. Iastremska ◽  
◽  
O. О. Iastremska ◽  
Keyword(s):  
Intellectual Property ◽  
Intangible Assets ◽  
Practical Aspect ◽  
The State ◽  
Capital Investments ◽  
Investment Activity ◽  
Homogeneous Groups ◽  
Economic Relations ◽  
State Process ◽  
Integral Indicator

The article is concerned with disclosing the theoretical and practical aspects of capitalization of enterprises. According to the theoretical aspect, it is determined that capitalization is considered as a phenomenon (a state), process and economic relations. In general, capitalization of enterprises has to be understood as the accumulation of capital. In connection with the tendencies of humanization and socialization along with prevailing in economic relations of the concept of dynamic competencies, the components of capitalization include the capitalization of not only market, but also human capital, intellectual property, ecologization, image, business relations that correspond to the peculiarities of the new economy and are based on the investment activity of enterprises that contribute to the growth of their capital. In the practical aspect, the capitalization of enterprises is researched in relation to the assessment of its condition and development. In the practical aspect, the expediency of using the concept of capitalization as a phenomenon (a state) is proved. Using the method of multidimensional factor analysis, namely the method of the main components, a system of partial indicators of the assessment of the state and development of capitalization of enterprises as a phenomenon is substantiated. The main indicators are chosen by the specific weight of: real investments at the expense of the enterprise’s own funds in the total volume of investments; investments in fixed capital in equity; real investments due to depreciations of the enterprise in the total volume of investments; investments in advertising in terms of the total amount of investments in innovations; capital investments in tangible assets in the total volume of capital investments; investments in computing equipment and software in the total amount of investments in intangible assets; investments for innovations in the total amount of investment; investments for informatization in the total volume of investments; investments in intangible assets in the total value of non-current assets; investments in intangible assets in the total value of assets combined into an integral indicator of capitalization by the additive convolution method. Particular values of the integral indicator of the enterprise for a certain year characterize the state of its capitalization, and values of these indicators for a few years – the process of capitalization development. On the example of 19 enterprises, applying the cluster analysis, the enterprises are grouped into homogeneous groups to compare the results of their capitalization. As a result of the use of the specified methods, a significant impact on its development of new components of capitalization is proved – the capitalization of intellectual property, intangible assets, communications, which should be given the most attention in the process of managing the development of capitalization.

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.

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