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Visoka poslovna škola strukovnih studija - Novi Sad , Novi Sad , Serbia
Visoka poslovna škola strukovnih studija - Novi Sad , Novi Sad , Serbia
Visoka poslovna škola strukovnih studija - Novi Sad , Novi Sad , Serbia
More than two-thirds of today's world trade comprises of transactions between related legal persons. Prices for the above-mentioned transactions within legal person or group of related legal persons are called transfer prices. These prices are usually established by the agreement and/or contract between related entities, and for that reason they are not market prices and supply and demand law and other market laws are not applicable to them. However, transfer prices are the subject of taxing and thus presented in regular financial reports. As such, they are relevant to a country, because of the tax amount that needs to be paid, and for business entities as well, due to presenting accomplished business results for current business year. Because of that, it is necessary to make an adequate account, establishing and presenting transfer pricing. In that sense, almost all countries members of Organisation for Economic Co-operation and Development, accepted guidelines from this organization and proposed methods for establishing transfer pricing were included in its legislation. Although Republic of Serbia is not a member of the above-mentioned organization, Law on Value Added Tax (VAT) suggests exactly the application of this methods during establishing transfer pricing. OECD guidelines have a significant role in establishing and application of this methods in Republic of Serbia (OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations), which were translated into Serbian in 2011. With reference to previous mentioned, the main purpose of this paper can be drawn, portrayed in an attempt to explain, through examples from practice, procedures in the application of these guidelines and the importance of establishing transfer pricing correctly.
transfer pricing, OECD guidelines, comparable price method, resale price method, cost plus method
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