publication . Article . 2006

Application of profit level indicators in transfer pricing

Dalia Ona Poškaitė; Martynas Novikovas;
Open Access English
  • Published: 01 Dec 2006 Journal: Ekonomika, volume 76 (issn: 1392-1258, eissn: 2424-6166, Copyright policy)
  • Publisher: Vilnius University Press
  • Country: Lithuania
Abstract
In 2004, the transfer pricing rules (the Order of the Minister of Finance No. IK-123) were issued in Lithuania, under which all the transactions between associated parties have to be concluded at the market price, i.e. the transfer prices should be in line with the arm's length principle. In practice, the arm's length price usually is determined applying profit level indicators. Therefore, this article aims to present the methodology for application of the profit level indicators in transfer pricing: the selection of transfer pricing method, calculation of profit level indicators and establishment of arm's length range. According to the Lithuanian transfer prici...
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ACM Computing Classification System: TheoryofComputation_MISCELLANEOUS
free text keywords: General Economics, Econometrics and Finance, transfer pricing rules ; profit level indicators ; Lithuania, lcsh:Commerce, lcsh:HF1-6182, lcsh:Economics as a science, lcsh:HB71-74, Business, Market liquidity, Microeconomics, Transfer pricing, Operating margin, Gross margin, Profit (accounting), Return on equity, Market price, Profit margin
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