Abstract
Research background: The continuing trend of globalization and interconnection of national economics is reviling many opportunities as well as threats arising from this development. The transfer pricing is one of these issues as a legal framework to adjust the tax base. But on the other hand, this issue also affects other important areas and reveals its risks. There is focused on the transfer pricing and its legal framework in these presented papers as recent years have indicated that there is a huge necessity to regulate and legislatively define the transfer pricing on the part of the state. And although we can take the opinion that this is a modern issue, we have been encountering this problem since 1915 and since this time it is gaining in its importance. Purpose of the article: We can distinguish two different parties. On the one hand, there is a company (most of the time its multinational company) with its goal to achieve the best possible efficiency also by paying the lowest possible taxes. On the other hand, we recognize the state with his aim of optimal tax policy allowing it to maximize the amount of collected taxes, i. e. it should be in the best interest of the state to define the transfer pricing precisely to prevent possible tax evasion. Methods: The main method used in the article is literature research and analysis of the law documents. Findings & Value added: The aim of this article is to identify the basic legislative guidelines in the field of transfer pricing in the international level as well as in the level of the Slovak republic.
Highlights
With the growing worldwide trend of globalization and interconnection of world economies, the concept of transfer pricing is getting to forefront, mainly due to the significant tax differences between individual countries, which creates environment for tax optimization
In connection with the efforts of multinational companies to reduce taxes, the issue of transfer pricing has become a top priority for the OECD and G8 members
[9] In the literature we can observe tendencies to eliminate tax differences in the global environment in order to test the tendency of multinational companies to shift income to low tax jurisdictions. [10]** Increasing importance of the transfer pricing issue is supported by the fact that in many countries more and more tax controls have being carried out focusing on this specific field
Summary
With the growing worldwide trend of globalization and interconnection of world economies, the concept of transfer pricing is getting to forefront, mainly due to the significant tax differences between individual countries, which creates environment for tax optimization. In connection with the efforts of multinational companies to reduce taxes, the issue of transfer pricing has become a top priority for the OECD and G8 members. [1] Pendse [2] states that there is amount of publications tackling with international transfer pricing mainly as the tool for tax minimization and international tax management. A lot of big companies operate in different international markets at the same time, and transactions in their close relationships should be traded at standard prices and standard market conditions, but this presumption is often unkept [3]. The issue of transfer prices has become an interdisciplinary topic, which intervenes mainly in tax, commercial, criminal or international law, but at the same time it is able to affect the risk management or financial management of the corporate. Shulman [4] in his work defined the rising necessity to set transfer prices from the point of view of various "non-tax" reasons.† Pendse [2] argues that in many cases taxes are not a priority for transfer pricing
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