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Reform of Transfer Pricing Rules in the Republic of Armenia

Author

Listed:
  • Milyausha R. Pinskaya

    (Financial Research Institute, Moscow 127006, Russia)

  • Ori A. Alaverdyan

    (Ministry of Finance of the Republic of Armenia, Yerevan 0010, Armenia)

  • Nikolay S. Milogolov

    (Financial Research Institute, Moscow 127006, Russia)

Abstract

The article analyzes legislative novelties in the area of transfer pricing in the Republic of Armenia through the best practices comparison and countryŐs economic and institutional specifics. The authorsŐ research approach is based on determination of national economic and institutional special features and outlining the riskiest types of transfer pricing transactions. Through the collected data and the best foreign practices the authors analyze the national transfer pricing rules and policy. As a result of such analysis there are presented several practical recommendations for the modification of tax legislation and transfer pricing rules in the Republic of Armenia. The authors also suggest implementation of possibility to use stock exchange quotes as benchmarks for commodity transactions when applying comparable uncontrolled price method. Introduction of safe harbor rules is also recommended for interests of financial arrangements on related party debt, based on key rates of fiscal markets (Central Bank rate, EURIBOR, LIBOR, SHIBOR and so on). The authors also discuss in details the problems of application of thin capitalization rules in combination with transfer pricing rules and double tax treaties. In addition, the article recommends several practical ideas on streamlining tax administration (setting up transition period without fines and sanctions or testing the existing thresholds for transfer pricing control).

Suggested Citation

  • Milyausha R. Pinskaya & Ori A. Alaverdyan & Nikolay S. Milogolov, 2018. "Reform of Transfer Pricing Rules in the Republic of Armenia," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 5, pages 108-119, October.
    • Handle: RePEc:fru:finjrn:180509:p:108-119
    DOI: 10.31107/2075-1990-2018-5-108-119
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    References listed on IDEAS

    as
    1. Nikolay S. Milogolov & Kermen N. Tserenova, 2016. "Tax Base Erosion in Russian Federation: Problems of Measuring, Scale and Effects," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 6, pages 7-19, December.
    2. Joel Cooper & Randall Fox & Jan Loeprick & Komal Mohindra, 2016. "Transfer Pricing and Developing Economies," World Bank Publications - Books, The World Bank Group, number 25095.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    tax policy; base erosion; corporate income tax; transfer pricing; commodity quotes; comparable uncontrolled price; OECD; developing countries;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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