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Panelový regresní model: nástroj pro odhad obvyklé rentability tržeb pro účely převodních cen v kontextu malých a středních podniků
[Panel Regression Model: A Tool for the Estimation of the Arm´s Length SME Profitability]

Author

Listed:
  • Danuše Nerudová
  • Veronika Solilová
  • Hana Bohušová
  • Patrik Svoboda
  • Marek Litzman

Abstract

In this paper we focus on transfer pricing issues of SME with aim to propose a methodological tool in the form of panel-regression model estimating arm´s length EBIT margin of industry where SME is operating, which is based on the Action Plan of the European Commission to ensure fair and effective corporate taxation, fulfilling the premise of simplicity and non-increasing the administrative burden and compliance costs of taxation. As a result separate panel regression models were determined for each industry sectors and EU Member States based on the variables, such as operating revenues, payroll, added value and tangible fixed assets. Those regression factors are able to statistically significantly explain the variability in the generation of EBIT margin in case of SME in EU 28, which is often used for transfer pricing purposes. Panel regression models can be used as a simple methodological tool to estimate the arm´s length SME profitability in the industry sector and the state where is SME operating. Moreover, it is able to identify possible distortion of transfer prices if SME is not generating arm´s length EBIT margin based on the model.

Suggested Citation

  • Danuše Nerudová & Veronika Solilová & Hana Bohušová & Patrik Svoboda & Marek Litzman, 2017. "Panelový regresní model: nástroj pro odhad obvyklé rentability tržeb pro účely převodních cen v kontextu malých a středních podniků [Panel Regression Model: A Tool for the Estimation of the Arm´s L," Politická ekonomie, Prague University of Economics and Business, vol. 2017(4), pages 440-459.
    • Handle: RePEc:prg:jnlpol:v:2017:y:2017:i:4:id:1154:p:440-459
    DOI: 10.18267/j.polek.1154
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    References listed on IDEAS

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    1. Swenson, Deborah L., 2001. "Tax Reforms and Evidence of Transfer Pricing," National Tax Journal, National Tax Association;National Tax Journal, vol. 54(1), pages 7-26, March.
    2. A. Roggeman & I. Verleyen & P. Van Cauwenberge & C. Coppens, 2012. "An Empirical Investigation into the Design of an EU Apportionment Formula Related to Profit Generating Factors," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 12/813, Ghent University, Faculty of Economics and Business Administration.
    3. Tomáš Krabec, 2007. "Operabilita pojmu tržní hodnoty v intencích standardizace oceňování [To the Operability of Market Value in Terms of Standardization of Valuation]," Politická ekonomie, Prague University of Economics and Business, vol. 2007(2), pages 263-274.
    4. Swenson, Deborah L., 2001. "Tax Reforms and Evidence of Transfer Pricing," National Tax Journal, National Tax Association, vol. 54(n. 1), pages 7-26, March.
    5. repec:idq:ictduk:11176 is not listed on IDEAS
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    More about this item

    Keywords

    European union (EU); small and medium-sized entities (SME); transfer pricing rules; arm's length principle; regression model;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law

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