Transfer pricing. Fiscal and accounting treatments

• Author: Anton C.E., Costache A.
• Pages: 253-260

Bulletin of the Transilvania University of Braşov

Series V: Economic Sciences • Vol. 8 (57) No. 2 - 2015

Transfer pricing. Fiscal and accounting treatments

Carmen Elena ANTON1, Alexandru COSTACHE2

Abstract: This paper presents brief assertions on the issue of the transfer pricing and their

fiscal and accounting treatment. The concept refers to the transactions between affiliated

parties, namely aims at those transactions that are not exclusively governed by the rules of

the free market, also considering other influence factors such as: the policy of the group of

entities related to the minimization of the fiscal cost at the group level. The aimed goals are

both fiscal and accounting and they see to the thoroughgoing study of the issues of the

implications of practicing transfer pricing between the affiliated entities.

Key-words: transfer pricing, file of the transfer pricing, accounting treatments, fiscal

treatments.

1. Introduction

The development of the market economy, the internationalization and the

globalization of business and especially the fact that most of the transaction are

carried out between economic entities of the same group imposed the need of

knowing and thoroughgoing study of the concept of „transfer pricing”.

The term of “transfer pricing” is found in the approach of the study of the

transactions between affiliated parties (that is transactions between the parties of the

same group, defined according to art. 7, paragraph 1, point 21 of Law 571/2003 on

the Tax Code, with subsequent amendments and completions), regardless if the

object of the transactions is the transfer of goods or intellectual property rights, the

execution of services or other types of transactions. The operations between the

affiliated parties must be carried out subject to the principles of the market value.

The principle of the market value requires that the prices used in the

transactions between the group entities are equal to those that would be practiced

between independent parties in similar circumstances. Yet, practice showed that the

prices used between affiliated parties may derogate from the basic rules offering the

group the possibility to distribute the the profits and the losses between the entities

1 Transilvania University of Brasov, carmen.anton@unitbv.ro

2 Transilvania University of Brasov, Law School, alexandrucostache1927@yahoo.com