Welcome to site of Scientific Works of NDFI (demo).

№ 3/2021

Nauk. pr. NDFI 2021 (3): 133–149https://doi.org/10.33763/npndfi2021.03.133

ACCOUNTING AND TAXATION

CHYZHYKOVA Olena ¹

¹SHEE “Kyiv National Economic University named after Vadym Hetman”
OrcID ID : https://orcid.org/0000-0002-0410-825X

Transfer pricing documentation: problematic aspects and best practice

Implementation of the requirements of the Action 13 BEPS will enable our country to comply with the best world practices of transfer pricing tax control and increase the level of trust in the relationship between taxpayers and tax authority. In addition, detailed transfer pricing documentation will ensure transparency for tax authorities to receive complete information to avoid the potential risks of transfer pricing. The aim of the article is to analyze the experience of the developed countries in compiling transfer pricing documentation (local file) and to provide recommendations to improve relevant practices for countries with economies in transition, in particular for Ukraine. The adoption of regulatory conventions and initiatives allows the international exchange of tax information and permit to evaluate tax optimization operations performed by taxpayers within the MNE. In such a way, it is necessary to study the international experience of transfer pricing documentation legal regulation and administration in order to give scientific credence to the areas of consideration in domestic practice. The legislation analysis of the countries with developed economy in the field of transfer pricing control and their practices allowed to fulfil benchmarking study for the terms of submission of the local file, the amount of fines in case breaking filing rules and revenue limits for the submission of the local file. The outcomes of the study indicate that the experience of developed countries which already use the reporting concept in the form of a local file by their national legislation can be used with competent authorities in reforming and improving the relevant laws of Ukraine.

Keywords:transfer pricing, transfer pricing documentation, local file, three-tiered approach to transfer pricing documentation, MNE, BEPS Action Plan, OECD

JEL: H26, H32, M48

Chyzhykova O. . Transfer pricing documentation: problematic aspects and best practice / O. Chyzhykova // Наукові праці НДФІ. - 2021. - № 3. - C. 133-149.

Article original in Ukrainian (pp. 133 - 149)

Download

Downloads :44

1. OECD. (2021, August 12). Signatories of the multilateral competent authority agreement on the exchange of country-by-country reports (CBC MCAA) and signing dates. Retrieved from www.oecd.org/tax/beps/CbC-MCAA-Signatories.pdf.
2. OECD. (n. d.). Action 13 Country-by-Country Reporting. Retrieved from www.oecd.org/tax/beps/beps-actions/action13/.
3. Verkhovna Rada of Ukraine. (2020). On Amendments to the Tax Code of Ukraine to Improve Tax Administration, Eliminate Technical and Logical Inconsistencies in Tax Legislation (Act No. 466-IX, January 16). Retrieved from zakon.rada.gov.ua/laws/show/466-20#Text [in Ukrainian].
4. OECD. (2013, July 13). White paper on transfer pricing documentation (Public Consultation). Retrieved from www.oecd.org/ctp/transfer-pricing/white-paper-transfer-pricing-documentation.pdf.
5. OECD. (n. d.). Practical toolkit to support the successful implementation by developing countries of effective transfer pricing documentation requirements (Draft version). Retrieved from www.oecd.org/ctp/transfer-pricing-documentation-requirements-toolkit-platform-for-collaboration-on-tax.htm.
6. Verkhovna Rada of Ukraine. (2010). Tax Code of Ukraine (Act. No. 2755-VI, December 2). Retrieved from zakon.rada.gov.ua/laws/show/2755-17#Text [in Ukrainian].
7. Möller, L. (2017). South Africa – Recent Developments in Transfer Pricing Documentation Requirements. International Transfer Pricing Journal, 24 (2). Retrieved from www.ibfd.org/IBFD-Products/Journal-Articles/International-Transfer-Pricing-Journal/collections/itpj/html/itpj_2017_02_za_1.html.
8. Didenko, V. (2017). Ukraine - Amendments to Transfer Pricing Provisions. International Transfer Pricing Journal, 24 (3). Retrieved from www.ibfd.org/IBFD-Products/Journal-Articles/International-Transfer-Pricing-Journal/collections/itpj/html/itpj_2017_03_ua_1.html.
9. Bilaney, S. K. (2017). India – India: Three-Tier Transfer Pricing Documentation. International Transfer Pricing Journal, 24 (5). Retrieved from www.ibfd.org/IBFD-Products/Journal-Articles/International-Transfer-Pricing-Journal/collections/itpj/html/itpj_2017_05_in_1.html.
10. Wittendorff, J. (2017). Denmark – Penalties for Non-Compliance with Transfer Pricing Documentation Rules. International Transfer Pricing Journal, 24 (4). Retrieved from www.ibfd.org/IBFD-Products/Journal-Articles/International-Transfer-Pricing-Journal/collections/itpj/html/itpj_2017_04_dk_1.html.
11. Haq, I. (2018). Pakistan – Scope of CbC Reporting and TP Documentation Requirements. International Transfer Pricing Journal, 25 (4). Retrieved from www.ibfd.org/IBFD-Products/Journal-Articles/International-Transfer-Pricing-Journal/collections/itpj/html/itpj_2018_04_pk_1.html.
12. Krastanov, S. (2020). Bulgaria/European Union – The New Mandatory Transfer Pricing Documentation Requirements in Bulgaria. International Transfer Pricing Journal, 27 (1). Retrieved from www.ibfd.org/IBFD-Products/Journal-Articles/International-Transfer-Pricing-Journal/collections/itpj/html/itpj_2020_01_bg_1.html.
13. Albano, A., & Monga, C. G. (2021). Requirements in Italy: The Renewed Interplay between Domestic Regulations and International Sources. International Transfer Pricing Journal, 28 (2). Retrieved from www.ibfd.org/IBFD-Products/Journal-Articles/International-Transfer-Pricing-Journal/collections/itpj/html/itpj_2021_02_it_1.html.
14. Belianto, D., & Rahayu, N. (2021). Analysis of Implementation of The Obligation Using Transfer Pricing Documentation on Domestic Transactions in Indonesia. International Journal of Scientific and Research Publications, 11 (7), 409–415. doi.org/10.29322/IJSRP.11.07.2021.p11554
15. Lovinska, L., Oliynuk, Ya., & Kucheriava, M. (2020). Implementation of international recommendations for application of a three-tiered approach to transfer pricing documentation in Ukraine. Finance of Ukraine, 9, 95–109 [in Ukrainian]. doi.org/10.33763/finukr2020.09.095
16. Oliynuk, Ya., & Kucheriava, M. (2021). Assessment of Ukraine’s readiness for international automatic exchange of information for tax purposes. Finance of Ukraine, 2, 85–97 [in Ukrainian]. doi.org/10.33763/finukr2021.02.085
17. Fedorchenko, O., & Stashenko, O. (2020). BEPS Action Plan: key directions of implementation. RFI Scientific Papers, 4, 119–130 [in Ukrainian]. doi.org/10.33763/npndfi2020.04.119
18. Kosenkova, A. (2019). Development of the concept of beneficial owner in the implementation of the BEPS plan in Ukraine. Entrepreneurship, Economy and Law, 8, 128–133 [in Ukrainian]. doi.org/10.32849/2663-5313/2019.8.24
19. Oleynikova, L., & Dolzhenko, I. (2020) Improvement of tax control in Ukraine on the basis of implementing BEPS plan tools and automatic information exchange. RFI Scientific Papers, 3, 79–94 [in Ukrainian]. doi.org/10.33763/npndfi2020.03.079
20. United Nations. (2021). World economic situation and prospects 2021. Retrieved from www.un.org/development/desa/dpad/wp-content/uploads/sites/45/WESP2021_FullReport.pdf.
21. OECD, & G20 Base Erosion and Profit Shifting Project. (2015). Transfer Pricing Documentation and Country-by-Country Reporting (Action 13 - 2015 Final Report). Paris : OECD Publishing. doi.org/10.1787/9789264241480-en
22. OECD. (2011, June 8). Multi-country analysis of existing transfer pricing simplification measures. Retrieved from www.oecd.org/ctp/transfer-pricing/48131481.pdf.
23. OECD. (n. d.). Mutual Agreement Procedure Statistics of transfer pricing cases per jurisdiction for 2019. Retrieved from www.oecd.org/tax/dispute/mutual-agreement-procedure-statistics-2019-per-jurisdiction-transfer-pricing.htm.
24. OECD Corporate Tax Statistics. (n. d.). Retrieved from stats.oecd.org/Index.aspx?DataSetCode=CBCR_TABLEI.
25. Roedl and Partner. (2021). OECD Master File concept and CbC Reporting – international documentation requirements. Retrieved from www.roedl.de/de-de/de/themen/documents/oecd-cbc-masterfile-implementierung-englisch.pdf.
26. Soo, M. J., & Glaize, A. (Eds.). (2019). OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (2017 Edition) and Transfer Pricing Features of Selected Countries 2019. Retrieved from www.ibfd.org/shop/OECD-Transfer-Pricing-Guidelines-Multinational-Enterprises-and-Tax-Administrations.