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Transfer Pricing in the European Union Context

Author

Listed:
  • Laurentiu-Mihai Tanase

    (The Bucharest University of Economic Studies, Romania)

  • Irene-Ioana Draghici

    (The Bucharest University of Economic Studies, Romania)

  • Norina Popovici

    (“Ovidius” University of Constanta, Faculty of Economic Sciences, Romania)

Abstract

The practice of transfer pricing for the purpose of fiscal optimization has become the center of attention in recent years due to the negative impact it has on the tax base, the state budget and competition. In this paper, we analyzed the functioning of transfer prices from two points of view, the value of fiscal optimization and the value of the market. The purpose was to determine the key indicators that address transfer prices in order to optimize the tax to come up with recommendations that could inhibit this practice. The results of the paper showed that the indicators are sales revenue, tax level and profit. So, the proposed recommendations considered the three indicators and the main recommendation regarding the profit involves the taxation of profit at the level of the value that would be realized under the conditions of the sale at the market price.

Suggested Citation

  • Laurentiu-Mihai Tanase & Irene-Ioana Draghici & Norina Popovici, 2023. "Transfer Pricing in the European Union Context," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(1), pages 245-248, August.
    • Handle: RePEc:ovi:oviste:v:xxiii:y:2023:i:1:p:245-248
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    More about this item

    Keywords

    transfer pricing; multinational companies; profit shifting; European Union;
    All these keywords.

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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