TRANSFEROVÉ OCEŇOVANIE A TRANSFEROVÁ DOKUMENTÁCIA V SLOVENSKEJ REPUBLIKE

Abstract

In these times many commercial companies while making their business try to adjust the tax base and thus reduce their tax burden. To change the tax base they carry out some fiction transactions in cooperation with other commercial companies to which they may be connected personally, economically or otherwise. Such interconnected persons are referred to as related parties either domestic or foreign. Transactions carried out between related parties may take the form of buying and selling of goods or provision of services or financial transactions. All transactions carried out between related parties belong to controlled transactions and must be valued and ensured to be compliant with the arm's length principle. The arm's length principle provides equality between dependent and independent persons, thereby avoiding the creation of tax benefits for dependent person by giving the dependent and independent persons on the same level. The company can use one of the transfer pricing methods allowed by the law on income tax. At the same time the company carrying out transactions between related parties is required to keep detailed documentation of the evaluation methods applied in controlled transactions for the relevant period, i.e. transfer pricing documentation. The said dossier demonstrates and explains the price creation process of the taxpayer in controlled transactions. We can therefore conclude that the objective of transfer pricing is to disallow such prices creation which allow optimizing the profit of the whole group as well as individual branches and either allowing to lower the tax burden or allowing tax evasion.