Transfer pricing-effects of arm's length principal method on tax burden entities

Profit level of enterprise which operates under the holding company is not necessarily a result of its business success and capabilities of the company to achieve a positive result. Management of companies results through specific transactions conducted with other companies within the holding compan...

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Bibliographic Details
Main Authors: Saković Dušan, Ilić Miloš
Format: Article
Language:English
Published: University of Novi Sad - Faculty of Economics, Subotica 2014-01-01
Series:Anali Ekonomskog fakulteta u Subotici
Subjects:
Online Access:https://scindeks-clanci.ceon.rs/data/pdf/0350-2120/2014/0350-21201432451S.pdf
Description
Summary:Profit level of enterprise which operates under the holding company is not necessarily a result of its business success and capabilities of the company to achieve a positive result. Management of companies results through specific transactions conducted with other companies within the holding company, and with all the other companies that are its 'related parties' can have an effect on the taxable profits of the enterprise too. Therefore, the necessary price adjustments must be conducted to achieve the process according to the 'arm's length principle'. Tax treatment of transactions between related parties in the Republic of Serbia gained more importance in the last decade, mainly due to the arrival of a number of foreign companies and the creation of vertically and horizontally integrated holding companies.
ISSN:0350-2120
2683-4162