Identification of threats and transfer pricing in the foreign trade security system of Ukraine

Kliuvak Oksana
Candidate of Economics Sciences, Associate Professor of the Department of Information Security and Business Communications, Ivan Franko National University of Lviv, Lviv, E-mail:oksana_klyuvak@ukr.net, ORCID ID: https://orcid.org/0000-0003-3383-926X

Cite this article:

Kliuvak O. (2023) Identification of threats and transfer pricing in the foreign trade security system of Ukraine. Ed.: V.V. Kovalenko (ed.-in-ch.) and others [Identyfikatsiia zahroz ta transfertne tsinoutvorennia u systemi zovnishnotorhivelnoi bezpeky Ukrainy; za red.: V.V. Kovalenko (gol. red.)], Scientific Bulletin of the Odesa National Economic University (ISSN 2313-4569), Odesa National Economics University, Odesa, No. 11-12 (312-313), pp. 246-254.

Abstract

The research aims to identify threats and tasks, improve the approach to evaluating export-import activity in terms of security, and determine the place of transfer pricing in the country's foreign trade security system in the conditions of the russianUkrainian war. The article examines the approach to classifying threats and tasks in foreign economic security, which are specified in Ukraine's Strategy of Economic Security until 2025 and require revision in the context of the russian-Ukrainian war. The improved approach involves the presence of a system of measures related to effective international cooperation, monitoring the effectiveness of the implementation of applied economic sanctions, prioritizing the development of SMART specialization of regions according to European standards, in particular for the service sector, circular economy models and the concept of sustainable development. The system of indicators for assessing the country's foreign trade security has been improved. In particular, it has been proposed to consider the effectiveness of transfer pricing in export-import operations security. Threats and methods of their minimization in transfer pricing at the micro, macro and mega levels have been identified. Foreign trade enterprises must check whether controlled export/import operations comply with the «outstretched hand» principle using methods defined in international regulatory documents (OECD Guidelines) and enshrined in Ukrainian legislation (Tax Code of Ukraine). It is advisable to conduct a thorough functional analysis to arrange the data on controlled transactions in terms of functions performed, risks assumed, and assets used, as well as to strengthen the taxpayer's position in possible disputes with tax authorities. The approach to checking compliance by the tax authorities with the principle of "outstretched hand" and the expediency of choosing a transfer pricing method using FAR analysis and Value Chain Analysis is presented. The originality and practical value of the study lie in the fact that the article defines the place of transfer pricing and the threat of non-compliance with its principles in the system of foreign trade security at the micro, macro and mega levels.

Keywords

foreign trade security, threat, economic security strategy, export-import operations, transfer pricing, the principle of an "outstretched hand", russian-Ukrainian war.

JEL classification: F100; F380; F500; F510; H260; DOI: https://doi.org/10.32680/2409-9260-2023-11-12-312-313-246-254

UD classification: 339.5

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