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Advance Pricing Arrangements as a Tax Strategy Tool for Related Entities

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  • Karolina Kuropka

Abstract

The article presents the procedure of concluding an advance pricing agreement between the taxpayer and the tax authority as a tool of tax strategy of large international groups. It was pointed out that the advance pricing agreement may be a key tool to protect affiliates operating in different tax jurisdictions from the questioning of market conditions in their transactions by tax administrations. The essence and stages of concluding this agreement are presented on the basis of the tax practice applied in Poland. In addition, special attention was paid to issues concerning properly implemented tax strategy in large international capital groups. The content of the article indicates certain benefits of establishing an advance pricing arrangement and its impact on the tax strategy in a capital group.

Suggested Citation

  • Karolina Kuropka, 2020. "Advance Pricing Arrangements as a Tax Strategy Tool for Related Entities," European Financial and Accounting Journal, Prague University of Economics and Business, vol. 2020(2), pages 31-44.
    • Handle: RePEc:prg:jnlefa:v:2020:y:2020:i:2:id:240:p:31-44
    DOI: 10.18267/j.efaj.240
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    References listed on IDEAS

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    1. Karel Brychta & Aleksandra Sulik-Górecka, 2019. "Legal Regulation for Advance Pricing Agreements in the Czech Republic and Poland - a Comparative Case Study," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 67(1), pages 209-224.
    2. Lorraine Eden & William Byrnes, . "Transfer pricing and state aid: the unintended consequences of advance pricing agreements," UNCTAD Transnational Corporations Journal, United Nations Conference on Trade and Development.
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    More about this item

    Keywords

    Tax law; Advance pricing arrangement; Related entities; Transfer prices; Tax strategy;
    All these keywords.

    JEL classification:

    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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