DEVELOPMENT OF TRANSFER PRICING RISK MANAGEMENT IN COMPANIES
A significant part of world trade is conducted within intrafirm trade on the basis of transfer prices, which results in arising risks of transfer pricing. Their effective management is difficult due to the lack of their identification, classification, measures to reduce them and misunderstanding by company executives of the need to manage them. In addition, constantly growing competition level, unstable market conditions, toughening transfer pricing regulation calls for new approaches to reducing intracompany costs in the transfer pricing process. The need to manage transfer pricing risks has been substantiated by the author, their main types have been identified and their classification has been presented based on periodicity, occurrence scope, predictability criteria. Tax, currency, reputational, legal and other risks, their sources of occurrence have been analyzed. Growing impact on reputational and tax transfer pricing risks on companies' activities has been shown. Considering the practical experience, sub-types of tax risks, based on a company's asset, has been identified; features of high-level tax-risk operations have been systematized. Measures reducing transfer pricing most frequent risks at the tactical and operational levels of management have been developed. Advantages, disadvantages and peculiarities of advance price agreements have been highlighted; two directions for transfer pricing documentation development have been presented: to be submitted to tax authorities and for internal accounting. The mechanism of transfer pricing risk management has been formed. In its context the essence of information database development has been studied, methodical approaches to the risk significance valuation have been presented, responsibility distribution principles have been proposed. Application of this mechanism allows improving the efficiency of transfer pricing risk management, reducing its costs and increasing companies' competitiveness.