Transfer pricing policy for intra-group accounting services

Abstract

The various activities carried out to provide the services play an important role in the transfer pricing of intra-group services. The level of accuracy and reasonableness of the transfer pricing of services will depend on the correctness of the costs allocated to these activities. One of the most important criteria for allocating costs is time as significant amount of the resources consumed in the provision of accounting services are human resources, for which the demand is influenced by the time required to perform the activities. This study aims to develop a transfer pricing model for the provision of accounting services within companies, which considers the variation in workflows and the changes in the time required to perform accounting procedures. The study was carried out using the methods of analysis, systematization, comparison and generalization of scientific literature and legal acts, as well as the methods of analysis of the company's activity processes, data collection, calculation, comparison, assessment of the time required to perform the provided intra-group accounting services, and data summarization and interview methods. The study found that the implementation of the transfer pricing model based on the TD ABC cost accounting system in an accounting services company makes the price of the services provided more reasonable based on the estimated volumes of work carried out; creates more transparency and objectivity in determination of pricing for different service recipients; and improves the efficiency of the management of the resources by determining their actual use. All of this reduces the risk of losses. Applying the TD ABC cost accounting-based transfer pricing model to the selected company and linking the price of services to the volume of activities performed not only improves the company's financial performance, but also the efficiency and reasonableness of transfer pricing decisions. This study complements previous studies on transfer pricing