Acta Univ. Agric. Silvic. Mendelianae Brun. 2013, 61, 2757-2768

https://doi.org/10.11118/actaun201361072757
Published online 2013-12-24

Transfer pricing and safe harbours

Veronika Solilová

Department of Accounting and Taxes, Mendel University in Brno, Zemědělská 1, 613 00 Brno, Czech Republic

Transfer prices are significant for both taxpayers and tax administrations because they determine in large part taxable profits of associated enterprises in different tax jurisdictions. Moreover, in the context of taxation, transfer prices must be complied with the arm’s length principle. However, Multinational Enterprises have been faced daily by conflicting rules and approaches to applying the arm’s length principle, burdensome documentation requirements, inconsistent audit standards and unpredictable competent authority outcomes. Therefore, the Committee on Fiscal Affairs launched another project on the administrative aspects of transfer pricing in 2010. On 16 May 2013 as a partial solution of this project was approved by the OECD Council the Revised Section E on Safe Harbours in Chapter IV of the Transfer Pricing Guidelines for Multinational Enterprises and Tax Authorities. The paper is focused on significant changes of newly approved chapter IV of the Transfer Pricing Guidelines for Multinational Enterprises and Tax Authorities, further on analysis of practice in this area, on advantages and disadvantages of safe harbours for taxpayers and competent authorities with aim to suggest recommendations on use of safe harbours in the Czech Republic.

References

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