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Transfer Pricing Methods for Services and the Policy of Fixed Length Principle

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  • Challoumis Constantinos

    (National and Kapodistrian University of Athens (N.K.U.A.), Athens, Greece)

Abstract

The paper deals with the methods used by companies for controlled transactions in services. The author performs an analysis of the ways a company that takes part in controlled transactions of transfer pricing can tackle tax issues using an adequate tax method. Services should comply with the arm’s length principle. Therefore, the best method rule and the comparability analysis have a critical role in the arm’s length principle of services. The paper compares the results of transfer pricing services with the transfer pricing of goods to conclude the similarities. The object of the paper is to determine the importance of the application of fixed length principle, meaning the application of additional tax for controlled transactions and declined tax for uncontrolled transactions. Therefore, this scrutiny showed that the unstable tax environments force enterprises to proceed to controlled transactions.

Suggested Citation

  • Challoumis Constantinos, 2019. "Transfer Pricing Methods for Services and the Policy of Fixed Length Principle," Economics and Business, Sciendo, vol. 33(1), pages 222-232, January.
    • Handle: RePEc:vrs:ecobus:v:33:y:2019:i:1:p:222-232:n:16
    DOI: 10.2478/eb-2019-0016
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    References listed on IDEAS

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    4. Constantinos CHALLOUMIS, 2018. "The Role of Risk to the International Controlled Transactions," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 3, pages 57-64.
    5. Gomes-Casseres, Benjamin, 1989. "Ownership structures of foreign subsidiaries : Theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 11(1), pages 1-25, January.
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    Cited by:

    1. Challoumis, Constantinos, 2024. "How AI Is Revolutionizing Economic Growth - Key Trends To Watch," MPRA Paper 122925, University Library of Munich, Germany.
    2. Challoumis, Constantinos, 2024. "AI And The Economy - The Challenges And Opportunities For Modern Job Seekers," MPRA Paper 122720, University Library of Munich, Germany.
    3. Challoumis, Constantinos, 2024. "Riding The Wave - How To Adapt To The Emerging Economy Fueled By AI Technology," MPRA Paper 122740, University Library of Munich, Germany.
    4. Challoumis, Constantinos, 2024. "The AI Revolution - Transforming The Monetary Landscape And Job Opportunities," MPRA Paper 122734, University Library of Munich, Germany.

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    More about this item

    Keywords

    Arm’s length principle; Fixed-length principle; Services; Transfer pricing;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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