Transfer Pricing in International Markets: Problems of Information Support

TP is regulated at the interstate level in accordance with international requirements set by the OECD TP Guidelines [7]. Most developed as well as developing countries implement OECD principles into their national TP control and regulation systems. It is necessary to note that non-OECD countries are also recommended to follow the Directives. To publicize them, multilateral seminars are held. Here problems of TP are discussed, and the Directives provisions are explained to representatives of tax administrations. The United States do not participate in these events, because their TP regulation system is much older (it is believed that the first regulatory legal act of the United States related to the TP regulation was introduced as early as in 1928 under Section 45 of the Tax Act adopted by the US Congress). That is why other countries either use the US experience or are guided by the OECD principles, although there are also combined variants. Both systems (OECD and USA) are very similar to each other. In particular, both are based on the market price principle and have similar TP methods. However, in the USA the mechanisms for the practical application of regulation standards and provisions are much more developed.

Japan and the United Kingdom are a prime example of developed countries whose national TP regulation systems are based on OECD.

The National Tax Administration of Japan regulates TP on the basis of the law on special taxation measures and the law on special taxation in the context of tax agreements. These rules are also based on OECD principles and are applied to prevent the movement of assets and double taxation. These rules also protect Japanese TNC from audits and sanctions by the Internal Revenue Service.

In the United Kingdom, the Board of Inland Revenue regulates TP according to the Income Tax and Corporate Tax Act adopted in 1998. The standards for the TP regulation for both tangible and intangible assets are similar to the OECD principles.

Despite some differences in various countries from the offered guidelines, in general, it is possible to note that the OECD Guidelines have made the basis for forming a national transfer pricing policy in Russia, Belarus, Kazakhstan and other countries.

It is necessary to note that the use of the OECD TP Guidelines is beneficial not only for tax authorities that now consider operations on TP as a promising object of tax control, but also for companies, because their correct use allows avoiding fines from tax authorities, reducing risks of double taxation and strengthening the positions during the audit.

III. RESULTA AND DISCUSSION

A. Information Support for Tp In the System of Business Partnership of Enterprises in International Markets

Now all business entities that use TP systems in international markets face the need in the efficient information support for TP. Therefore, the main thing for such entities is to form a well-adjusted data system for decision-making and control over TP and controlled transactions.

In this case, it means that for the TP system to function efficiently and not to cause permanent risks for the enterprise in terms of the possibility to get considerable fines within the tax control, it is necessary to have a well-adjusted management and financial accounting system in order to provide all departments directly related to concluding and executing contracts with counterparties within the affiliated entities with access to top quality information.

It is better for economic entities to function under the conditions of preliminary, rather than subsequent control of such operations.

In this case one of the most important and at the same time difficult stages is the organization of full-fledged document flow for the purposes of TP and the subsequent analysis of the collected and documented information.

In the system of financial and management accounting, an optimal document flow system should be formed. Its aim is to permanently ensure high quality results of analyzing TP to prevent potential losses from improper application of TP rules (or non-compliance with them) by the enterprise.

It is reasonable to use the list of basic information, including the following minimum as suggestions for creating an optimal document flow system:

— Arrays of data on controlled transactions, as well as transactions that may become potentially controlled,

— List of related persons,

— List of sources of information for the marketing analysis for the purposes of TP,

— Price information about the goods (works, services) that are subject to controlled transactions, and

— Parameters (indicators/conditions) of transactions to be monitored, except for prices, etc.