Transfer pricing in carrying out intra-group transactions: the concept and impact on financial statements
Journal Title: Економіка: реалії часу - Year 2016, Vol 3, Issue 25
Abstract
Currently, most models of market economy, both in Ukraine and abroad, actively create, operate and develop the group of companies such as holding companies, concerns, corporations, etc. Specific features of transfer pricing in carrying out intra-group transactions, necessity to strengthen control on the volume of transactions and debts in consequence of them, specific features of taxation and individual procedures determine working out theoretical and practical recommendations on reporting payments within the group of companies. The purpose of the article is to analyze the contents of the existing transfer pricing methods used in carrying out intra calculations, determine their strengths and weaknesses, impact on financial statements group of companies. It is established that the choice of transfer pricing method for group companies should take into account the specifics of the group, the advantages and disadvantages of each of these methods of pricing. To simplify the procedures of drawing up the Statement of Controlled Operations and systematic determination of the difference between transfer pricing/tariffs and regular price it is offered to systemize the information on prices for intra-group transactions in the internal document “Working Table determining the difference between transfer price/tariff and the regular price for drawing up a Statement of Controlled Operations”. Also, to improve prompt delivery of information on intra calculations for analysis and control, and to exclude remnants from them while preparing consolidated financial statements of a parent/holding company, additional written lines of financial statements are proposed.
Authors and Affiliations
Natalia Goilo
Keywords
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