Transfer pricing of transnational corporations




transfer pricing, transnational corporations, OECD Guidelines, the arm’s length principle, the comparable uncontrolled price method, controlled transactions.


Background. In the context of globalization, transnational corporations have turned into highly concentrated points of the world economy and the principal markets for goods and services. It is under such conditions that a comprehensive research of the pricing system within the framework of their activities is relevant.
Analysis of recent research and publications has revealed that the process of setting prices for products within their activities in different countries and the development of innovations in domestic legislation require in-depth study.
The aim of the article was to study possible transfer pricing systems for TNCs in order to eliminate risks when calculating the exact cost of products and avoid possible situations of non-payment of due taxes.
Materials and methods. A set of general scientific methods of cognition is applied: inductive, deductive, system analysis, theoretical generalization, formal-logical, analysis and synthesis.
Results. The transfer pricing system is becoming the key direction in the process of planning and profit maximization. The methods of setting the transfer price are legally enshrined in the current Tax Code of Ukraine. However, the use of these methods is a top priority for checking compliance with the «arm’s length»principle. It is determined that in order to comply with this principle, it is necessary to compare controlled and uncontrolled transactions, based on the criterion of tax benefits, as well as to analyse all the advantages and disadvantages that they create.
Conclusion. The issue of proper transfer pricing plays a leading role in the export or import of goods. Particular attention should be paid to the sources of information indicated by taxpayers and used in order to ensure compliance with the requirements for justification in the documentation on transfer pricing compliance with the conditions of controlled transactions with the arm’s length principle.
Prospects for further research are to provide practical recommendations for compliance of the legal and regulatory framework for transfer pricing with the requirements of the world economy in the direction of preventing the implementation of tax avoidance schemes.

Author Biography

Iryna HLADIY, Vinnytsia Institute of Trade and Economics Kyiv National University of Trade and Economics

Candidate of Sciences (Economics), Associate Professor at the Department of Accounting and Taxation


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How to Cite

HLADIY І. (2021). Transfer pricing of transnational corporations. oreign rade: onomics, inance, aw, 116(3), 85–97.