Noțiuni introductive privind prețurile de transfer și dosarul prețurilor de transfer

Article also available in / Articol disponibil și în limba: roRomână (Romanian)

Introduction in transfer pricing

article published on 30.03.2017

In the management accounting field “transfer prices” are those prices applied in transactions between divisions of the same entity.

In the tax field “transfer prices” are those prices applied in transactions between at least two different related parties (legal entities and / or individuals).

As a general rule, two entities are related when decisions on prices applied by both entities may be taken by the same entity directly or indirectly (entity means either an individual or a legal entity).

Why is transfer pricing important?

Transfer pricing can significantly impact the taxable base declared by taxpayers, including the taxes and duties paid to the state budget.

Given the high volume of international trade and the need for cost efficiency, groups of companies have to take action in order to survive.  Among the measures taken, one may include tax optimization.

In this context, the tax authorities all over the world are trying to protect their revenues.  Therefore, in recent years, we witness more numerous and aggressive transfer pricing audits which sometimes end up with transfer pricing adjustments.

These trends are highlighted by the latest package of documents published by the OECD entitled “Base Erosion and Profit Shifting” (OECD is the European Organization which issued the OECD guidelines from which transfer pricing legislations in many countries are “inspired”, including Romania).

What taxpayers have to know about transfer pricing?

Firstly, it is good to know that transfer pricing legislation is not sufficiently restrictive (neither in Romania nor in other countries) on many issues, leaving more room for interpretation than, for example, tax legislation or accounting standards. As such, most taxpayers choose to work with specialized consultants who know in practice how the tax authorities interpret the law.

Secondly, taxpayers should know that Romanian legislation requires certain taxpayers to prepare a transfer pricing file (annually in case of large taxpayers or at the request of tax authorities in case of medium / small taxpayers).

For more information about the criteria for the preparation of the transfer pricing file click here.

What is a transfer pricing file?

The transfer pricing file is a document that describes and analyses the transactions made by a company with its related parties.

The end result of this exercise is a document that compares prices / margins actually obtained in intra-group transactions with prices / margins obtained in transactions between independent parties.

In addition, the transfer pricing file should contain further information on the general context of the business in order to provide the reader with information on specific circumstances regarding the company, group and respectively on the transactions:

1. an overview of the group’s activity;

2. an overview of the company’s activities;

3. the economic analysis (including the description of the transactions, functional analyses, the economic justification of the transfer pricing).



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