AN APPROACH ON LINKS BETWEEN TRANSFER PRICING AND TAX HAVENS

Transfer pricing are the prices at which a company transfers physical goods and intangible property or provides services to affiliated companies. Transfer pricing mechanism is the most frequently used instrument for the transfer of the tax base from countries with high tax to low tax countries. In the context of transfer pricing, all transactions should be made only respecting the principle of market value (Arm’s length principle). Under current conditions, we can say that globalization influences the transfer pricing, because it makes possible to transfer profits from one country to another, by removing state barriers. The expression "transfer pricing" is used as shorthand for multinational corporations to store profits in tax havens and to avoid tax evasion in developed countries. These two terms (transfer pricing and tax havens) combined, make the benefits of affiliated groups to grow impressively.