Anali Ekonomskog fakulteta u Subotici (Jan 2018)
Quality of reporting on transfer pricing: Prerequisite of the quality tax reporting of related parties
Abstract
Category of transfer pricing, as prices generated in relationships between related parties constituting the so-called 'groupings' has escalated in recent decades, with the escalation of now, freely speaking, the unstoppable process of globalization. To control the relationship, i.e. the price at which transactions between related parties are concluded, with the aim of preventing manipulation in this field, reporting on transfer prices, i.e. disclosure and submission of transfer pricing reports to the relevant institutions, becomes the obligation of many related parties, and in accordance with the law. Considering that, among other things, in the transfer pricing report, a detailed analysis determines the amount of correction of the tax base in the tax payer's balance sheet, the quality of the transfer pricing reports will certainly be influenced by the quality of reporting through the tax balance. Namely, the quality of transfer pricing reporting is the prerequisite for the quality of tax reporting. In this regard, the subject of this paper is the report, i.e. the study on transfer pricing of related parties and the way of its creation, with consideration of the legal provisions and terms in the field of transfer prices. The aim of the paper is to show which elements are the factor of quality of transfer pricing reporting, seen through the elements that make up the study on transfer pricing, and to point out how to determine the amount of correction to be made in the tax balance, and whose quality will depend, inter alia, and the quality of the aforementioned study. By the method of analysis and concretization, the author pointed to the importance of tightening regulation in the field of transfer prices after 2013 in the Republic of Serbia. Of course, bearing in mind the limiting factors in writing this paper concerning the impossibility of exact quantification of the effects of changes in tax regulations and more rigid transfer pricing provisions on the increase / reducing the realization of the profit tax, because it is a phenomenon that is affected by a wide range of factors, it is undisputable that after the tightening of regulations in the field of transfer prices and raising the quality of transfer pricing reporting to a higher level, there has been progressive movement of the profit tax category.
