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Author(s): Ivana Váryová, Iveta Košovská

Title: Transfer pricing of transactions between related parties in the Slovak Republic

Source: International Scientific Days 2016. The Agri-Food Value Chain: Challenges for Natural Resources Management and Society

Document Type: Scientific paper

ISBN: 978-80-552-1503-7


Publisher: Slovak University of Agriculture in Nitra

PY, pages: 2016, 429-437

Published on-line: 2016-06-24

Language: eng

Abstract: Transfer pricing is the setting of prices for transactions between related parties for tax purposes in order to meet the arm´s length principle. Unrelated relationship is characterized by the fact that parties participated in the mutual transactions pursue their own interests and their aim is to achieve the highest profit. Related parties often pursue the mutual aim and they try to obtain the highest profit for a group. If prices applied in business relationships between related parties differ from comparable business relationships between unrelated parties, the related party is obliged to adjust the tax base to a difference. In order to determine a difference, several methods of transfer pricing or their combinations are used. The Slovak Republic adopts the methods of transfer pricing pursuant to the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations which are based on the comparison of prices and the comparison of profit. Since 2015 the rules of transfer pricing has been enlarged to the obligation to keep the documentation on used methods of transfer pricing except for foreign related parties to domestic related parties as well in order to minimize the tax evasion. The article aim is to assess the transfer pricing in the Slovak Republic and to review the strengths and weaknesses of individual methods of transfer pricing.

Keywords: arm´s length principle, documentation, method, related parties, transfer pricing

JEL Classification: H25, H71, M41

Rights: Open Access :: Creative Commons Attribution 4.0 Licence
Creative Commons License
Toto dielo je publikované pod/This work is licensed under a Creative Commons Attribution 4.0 International License.