The project in five facts.
Challenge, approach and results.
The integration of companies is a consequence of various technical, economic and legal reasons. The rule of related companies is based primarily on the capital participation of one company in another company. The calculation demonstrated the impact of the internal comparable uncontrolled price method, which the company uses for tax calculation. She found that in the case studied, there was a discrepancy between the reported values and comparable market prices, so it was necessary to adjust revenues to such a value that revenues would be at least equal to comparable market prices. This means that the tax base in the calculation of corporate income tax must be adjusted so that revenues are increased.
Problem
The integration of companies is a consequence of various technical, economic and legal reasons. The rule of related companies is based primarily on the capital participation of one company in another company. Between related companies, transfer prices are used both in the sale and purchase of goods or services.
With transfer prices, related companies can manipulate in a way that allows them to pay less tax than they otherwise would, which can harm the state budget.
Solution and Method
The calculation demonstrated the impact of the internal comparable uncontrolled price method, which the company uses for tax calculation.
Results
She found that in the case studied, there was a discrepancy between the reported values and comparable market prices, so it was necessary to adjust revenues to such a value that revenues would be at least equal to comparable market prices. This means that the tax base in the calculation of corporate income tax must be adjusted so that revenues are increased. The diploma thesis proved that the person responsible for preparing tax calculations, as well as the company management, must pay considerable attention to transfer prices, methods for determining transfer prices and documentation related to transfer prices.
The collection, organisation and preparation of documentation is crucial for the company, as the documentation proves the compliance of transfer prices with comparable market prices. At the same time, it is very important for the company to collect data and documentation on an ongoing basis, regardless of the deadline by which the company must prepare documentation related to transfer prices.
Module, programme and stories.
Your diploma project for a real company.
A diploma thesis at Academia solves a challenge from a company – often the one where you do your 800 hours of placement. Read about the Računovodstvo module or book a consultation.