The significance of determination of transfer prices between related parties

Abstract

The determination of transfer prices between related parties is initiated by OECD Guidelines in order to avoid tax on company profits and discourage business through tax havens. In Serbia, the transfer prices are determined under the tax balance. The effect of transfer prices in local conditions is questionable, but tax administration insists on them.

Keywords

• related parties
• transfer prices
• methods for determining transfer prices
• prices out of reach
• profit