INFLUENCE OF TRANSFER PRICES ON TAX EVASION

In recent years, transfer (internal) prices have become the subject of interest of many theorists and regulators, both for determining their effects on business and for the possibility of exploiting tax evasion. The foundations for the functioning of transfer pricing are given in the OECD guidelines, and further elaborated through national tax laws and regulations for their application. This regulatory framework treats all relevant entities, circumstances and conditions of transfer pricing, identification and explanation of transfer pricing methodology, and providing objective evidence on the application of the principle of independence and setting other conditions in transactions between related companies, all in order to prevent tax evasion and proven application of legal regulations in the field of transfer pricing. Since transfer prices are linked to decentralized related business entities consisting of parent companies and branches (organizational units or centers of responsibility) operating in the same or another country, tax evasion is done through the transfer of profits from a country with a high tax burden to a country with a lower tax rate. In addition, tax evasion is performed by reducing the tax base for value added tax, which is the difference between the transfer (non-market) price and the market price. Transfer price is formed using methods that are classified into two groups: classical transaction methods or transaction profit methods. Which method will be applied from these two groups depends on the adopted policy of the business entity. In principle, methods that are in line with the nature of the business of the business entity and that can determine the tax base in the most objective way should prevail. In practice, a method is chosen that results in maximizing profits and minimizing tax liabilities, which further leads to a better competitive position of the business entity, improvement of market position and increase of market shares. The subject of observation are all transactions between related parties on the basis of direct and indirect agreements, contracts, agreements and similar business relationships that affect the tax base, namely transactions with assets, services, financial transactions, capital transactions (purchase and sale of securities and shares ) and other similar transactions. The purpose of this paper is to investigate whether transfer prices are in line with the principle of marketability, regardless of the applied calculation method. The aim of this paper is to eliminate all possibilities of tax evasion in transactions between the parent company and subsidiaries within the group. In order to achieve the stated goal and purpose, the basic hypothesis of the work is set, which states that the application of different methods of calculating transfer prices affects the amount of the tax base. Proof of this hypothesis will be done on a case study example. The obtained results can serve as a basis for the commitment of the business entity for the appropriate method of calculating transfer prices. This excludes the individual goals of the business entity and the primacy given to one of the basic goals of taxation: achieving efficiency and fairness.

OBSTACLES TO THE IMPLEMENTATION OF THE CROWN LAW ON THE SMALL AND MEDIUM ENTERPRISE BUSINESS IN BOSNIA AND HERZEGOVINA

In the world economy, small and medium sized entreprises (SMEs) dominate in the number of overall enterprises (90-99% of all enterprises, depending on the definition used) and in economic contributions (GDP growth, productivity, job creation, innovation, level of competition, etc.) (Lundström i Stevenson, 2001). Because small businesses generate jobs, tax revenue, functional products, charitable donations, technological development, and social contributions to communities, their success and sustainability are important for social and economic development. In addition to the impact on public health, coronavirus disease 2019 (COVID-19) caused a major economic shock and the greatest consequences were felt by the small and medium-sized enterprises. Due to the crisis caused by the Covid-19 pandemic, countries and their companies are facing major problems of human and business capacities sustainability. Although governments have enacted private sector policies, there are constraints that have direct implications for economic growth potential. In this paper, we investigate the impact of COVID-19 on SMEs in Bosnia and Herzegovina, focusing on the impact of the Law for mitigation negative economic consequences, better known as the Crown-Law. We first examined how the companies performed this year compared to the previous year, and then we examined whether there were barriers to the implementation of the Crowv-Law and if so, whether they were internal or external. The results of this research point to the fact that the Crown-Law is not good enough. The measures are not in line with the strategic needs of SMEs, there is a time limit and the measures are short-term. The SME development strategy should be coordinated based on the mechanism of public-private dialogue. SMEs need business services to improve their competitiveness (information, consulting, training, accounting, legal services, advertising, marketing, technical and technological services, including testing standards and certification requirements abroad, product upgrades, etc.). The results of this research provide some information of the business results and expectations of SMEs in times of crisis, while offering insight into measures designed to aid recovery. The results highlight the role that the length of the crisis will play in determining its final impact, which policymakers should consider when considering the scale of interventions needed. On the other side, the Covid-19 pandemic has opened up new challenges, but also opportunities for SMEs, such as technological advances that create new products and transform almost every phase of the business from manufacturing to marketing, procurement and logistics. Currently, only a small part of the SME sector is able to recognize and seize these opportunities and meet the challenges.

THE CONTRIBUTION OF MIGRATION TO ECONOMIC GROWTH: THE EXAMPLE OF THE CITY OF ZAGREB

The problems in this paper belong to the field of migration and economy. The connection between migration and the economy has been proven on a global level, and as far as the Republic of Croatia is concerned, it is especially important to observe it through the City of Zagreb, which is the most important migration and economic center in the Republic of Croatia. Also, the accession of the Republic of Croatia to the European Union emphasized the observation and research of this connection because it created the preconditions for freer movement and employment of the population of the Republic of Croatia and the City of Zagreb within the European Union. The aim of this paper is to determine the contribution of migration to the economic growth of the City of Zagreb. The hypothesis presented in the paper is that there is a significant contribution of migration to the economic growth of the City of Zagreb. The disposition of the paper consists of six parts. The introduction explains the relevance of the topic, states the aim of the paper and hypotheses, explains the empirical part, the contribution of the paper and the disposition. The second part of the paper refers to the theoretical framework of the impact of migration on economic growth. The third part of the paper presents the migration processes of the City of Zagreb in the period from 2011 to 2018. The fourth part deals with economic activity in the City of Zagreb in the period from 2011 to 2017. The observed indicators of economic activity in the City of Zagreb are GDP and GDP per capita, and the graph in this part of the paper shows that GDP and GDP per capita in the observed period are higher at the end of the period than at the beginning. The fifth part of the paper refers to the empirical research of the contribution of migration to the economic growth of the City of Zagreb. The empirical part of the paper is based on correlations and regression analyses. This paper proves the hypothesis because the results indicate a significant impact of the variables of total and external migration on the GDP of the City of Zagreb and GDP per capita of the City of Zagreb. Decision-makers in the City of Zagreb can use the results of the research as a basis for maximizing the economic benefits they can get from migration. The conclusion provides an overview of the aim of the work, the results of the research, the limitations, the implications and the recommendations for future research.

LOCAL MEDIA IN THE CORONA CRISIS: SIGNIFICANCE AND CHALLENGES ON THE EXAMPLE OF POŽEGA 034 PORTAL

The epidemic of the disease COVID-19, in Požeština in relation to China, where it originated in other parts of Croatia, appeared somewhat later, while Požega-Slavonia County in terms of total share in relation to other counties in Croatia remained relatively well , 16th place, out of a total of 20 counties, ie a smaller number of patients was recorded. In the conditions of public health danger to the health and lives of people with expressed uncertainty, citizens around the world were flooded with numerous information, about the disease, ways of prevention, treatment that at one point threatened to turn into an infodemia, as warned by the WHO. The importance of crisis communication in such conditions is of great importance, and how governments and headquarters communicate messages about the crisis to the public, which is discussed in the first parts of the paper and points out several inconsistencies and illogicalities in the actions of the state headquarters. prohibition and permission to make recommendations contrary to the epidemiologist’s recommendations. But more important than the recommendations of headquarters and governments, today are the recommendations and news transmitted by digital media, and especially the local ones that bring news and recommendations for the area where we live. Therefore, the aim of this paper was to investigate in the central part the significance of the local 034 Portal in the Corona crisis, and its monitoring of the crisis and its impact on the public. Research through several segments, it was found that the portal maintained the level of reporting on regular events and adjusted reporting on the Crown to the conditions and situation in the county, not leading to sensationalism, concern, fear, but was a carrier of preventive activities and a good ally in the fight. against the epidemic, that is, he followed the guidelines for informing the WHO and did not contribute to the creation of an infodemia.

RELATIONSHIP BETWEEN FINANCING AND EFFICIENCY OF INNOVATIVE ACTIVITIES OF INDUSTRIAL ENTERPRISES: EVIDENCE FROM UKRAINE

The article focuses on the study of the closeness of the relationship obtained from different sources and used in different areas, finance, with the effectiveness of innovation, measured by the number of developed innovative products and the number of introduced new technological processes. The input information was the data of industrial enterprises of Ukraine for the period 2015-2019, summarized in statistical reporting and presented on the official resources of the State Statistics Service. To accomplish these objectives, the methods of correlation-regression analysis and analysis of the dynamics and structure of statistical indicators of innovation of industrial enterprises of Ukraine were used. Possible causes of crisis phenomena of innovative activity of Ukrainian enterprises that hinder the economic development of the national economy are discussed. The basis for further research of complex and individual influence of factors on development of innovative activity of the enterprises of various branches of economy is provided.

STATISTICAL MODELING OF CONSUMER PROFILES IN ADAPTATION OF MARKETING STRATEGY IN CONDITIONS OF COVID-19 PANDEMIC

Business activity and the production portfolio of business systems are directed to the consumers’ requirements by marketing activities, therefore, there are situations in which these activities create and stimulate certain needs and requirements. Market creation is a complex activity that affects a large number of disciplines and synergistically creates satisfaction with the product and / or service, which, in a pandemic, is a special challenge for the creators of the product portfolio, especially for distribution channels. Distribution of products and / or services is a key factor of business success in the conditions of social distance and insufficiently developed technical - technological support for the transition to the virtual sphere of business and communication. A useful base of business activity includes adequate modeling of consumer profiles in order to adapt the marketing strategy to them, which ultimately provides guidelines for market positioning as a precondition for business efficiency. Creating consumer profiles requires a model analysis of habits, preferences, talents, personal and socio - psychological characteristics that allow the creation of similar groups, and thus the adaptation of marketing strategies in line with the created consumer profiles. The empirical basis of the proposed solutions enables a confidence in the modeled information, and thus reliability in their objectivness, which enables business flexibility conditioned by external stimuli, such as the COVID - 19, but it can also be used in other business conditions. The aim of the research is to establish a correlation and find answers on how to fit consumer profiles and their purchase under pandemic conditions. Consumer purchase depends on numerous factors, both internal and external, which are valid in regular conditions as well. Considering the current conditions, it is necessary to evaluate consumers’ behaviour during the purchase. Consumer profiling is not universal and cannot be generalized for the global market, especially if it is programmed for providers within a selected geographic unit. The research assumption is that different results would be obtained in another territorial unit and a different consumer typology would be profiled, but this assumption needs to be checked, which opens up the possibilities of new research projects. The research marked off another group of factors, known as factor II, which includes: marital status, number of children, respondent’s age, children’s age, ownership of a residential building and employment status. Consumers’ reaction to consumption is mostly within these factors. Data analysis and generation of management information that profiles consumers can be performed in other territorial units and in other time frames, and they are based on the knowledge of tools for data collection and processing, and then consulting service management - marketing adjustment of strategic commitments and business policy in accordance with the generated results.

FEMALE BODY IN MEDIA AND MARKETING

This research aims to examine the attitude towards the ways in which the female body is represented, i.e. to determine the extent to which the respondents (women) agree with the statements based on critical observations of feminist and researchers on gender issues on unethical (unacceptable) representation and treatment of woman and the female body in media and marketing. The study involved 509 women, aged between 18 and 55 years. The attitude towards the representation of the female body is operationalized by a scale (RFB scale) of 21 statements, grouped into three dimensions- sexual objectification, promotion of the “ideal” female body and instrumentalization of the female body. The results show that the respondents, although to varying degrees, agree with all the statements that describe the ways in which the female body is presented in the media and in marketing. Although all three dimensions are quite common in the media and in marketing, the respondents see the instrumentalization (abuse) of the female body for commercial purposes as the most pronounced phenomenon. Both on an overall scale and in dimensions, women from urban areas show a higher score than women living in rural areas. There are no statistically significant differences between groups defined by other sociodemographic characteristics (age, marital status, region, type of neighborhood, education). The conclusion is that the respondents support the attitude of feminists and researchers of gender issues that in the media and in marketing there is sexual objectification and promotion of the “ideal” female body, and especially pronounced instrumentalization (abuse) of women and the female body for commercial purposes.

EXTENSION OF THE MINIMUM COST FLOW PROBLEM (MCFP OR CNF) BY CONSIDERATION OF TIME AND QUANTITY OF LOADS WITH MAXIMUM TIME

This paper extends the general problem of minimizing the total cost of transport on the road network (CNF) by considering the total time, maximum time and total amount of cargo with the longest time. In the literature available to us, models with timing and amount of cargo in the case of a standard transport task were exposed. Optimization is possible by combining 5 criteria, 2 linear and 3 nonlinear ones over the same set of linear constraints. Multicriteria optimization determines Pareto-optimal solutions. Interactive analyst-software algorithms for solving the selected models were defined. The solution of hypothetical problems was illustrated. Closed model with 5 two-way asymmetric communications using software for CNF and it is possible to use software for LP. Four one-criteria problems were solved: total costs, overall transport performance from a time standpoint, transport time (problem of the second type by time) total transport time (problem of the third type by time) and one bi-criteria problem related to the simultaneous minimization of the maximum duration of transport and total costs.

ECONOMIC IMPACT OF COVID-19 ON AIR TRAFFIC INDUSTRY: CHALLENGES IN CROATIA

By the end of September, 2020 total worldwide number of Covid-19 infections has surpassed 34 million inhabitants, while the number of deaths caused by health pandemic crisis stands at more than one million. It’s predicted that the year 2020 will see about 10 percent drop in economic growth compared to the previous year. Different macroeconomic scientific and professional authors in their forecasts agree that the worse scenarios will be suffered by global and regional tourism industries together with air transport industry. The consequences of Covid-19 on air transport results in 2020 compared to results in the last three decades are analysed on four different levels - worldwide, European, South-East European and Croatian aviation achievements. Besides, the correlation between the global touristic and air carriers’ results in last three decades is considered in the paper with adequate conclusions. IATA monitors developments related to the Coronavirus outbreak, publishes industry statistics and analysis of COVID-19 impacts on the financial and traffic performance and produces outlook for the global air transport industry. According to its latest forecast, full-year 2020 traffic is expected to be down by 66% compared to 2019 while revenues are expected to fall by even more than demand. ICAO has prepared few models and analyses of final business results with different magnitudes on air transport industry recovery. Special attention and business details in the paper are devoted to the Croatian air transport situation in light of Covid-19 with conclusions, suggestions and proposals for future survival and development scenarios, including appropriate actions and measures as well as state, regional or local financial support. The activities and measures taken by Croatia Airlines can be characterized as an example of good practice in the conditions of the Covid-19 pandemic and are articulated as guidelines for the operations of regional airlines in the mentioned conditions.

CREATING A COMPETITIVE ADVANTAGE: NEW CHALLENGES AHEAD

Competitiveness is a central issue of a growing open, interconnected and integrated global economy, but it is not yet uniquely defined. There are many factors that determine competitiveness, and they change with the development of globalization, and even today, under the conditions of Industry 4.0. The coronavirus (COVID-19) pandemic has also provoked a situation in which both policies to foster competitiveness need to be adapted. In order to achieve competitiveness, countries must create factors and develop policies that will create the conditions for better positioning in the global market. In order to successfully integrate into new markets, but at the same time highlight and continue economic development, reevaluation of competitiveness determinants, as well as past positioning strategies, is necessary. The paper analyses the theoretical settings and determinants of competitiveness, as well as the challenges of today that economies should respond to. Understanding new features of the competitiveness can help policymakers develop approaches for enhancing their economic performance.