Transfer Pricing and Value Creation

1. S. 340Introduction

Direct taxation has attracted increased attention after several leaks and litigation processes that brought to light enormous amounts of corporate taxes that were deemed to be unpaid. The public opinion was astonished by the fact that tax schemes had been developed by global and well-known companies.

Starting from this point of time, taxes have been considered as not only the financial or internal fiscal attribute but also as the matter of reputation for companies. This thesis is amplified in regards to the entities dealing with commodities since the sector faces one of the highest taxation burdens, comprising not only common taxes but also specially imposed royalties, production-sharing tax, resource rent tax, and others. Developing states that dependent on natural resources extraction often pursue the policy of establishing national companies that control resources for commodities and are thus key taxpayers in these States. Hence, the attitude of social groups towards commodity companies has changed and requires them to demonstrate awareness of taxation that construes income for national budgets. Any disproportion in the allocation of taxes for such companies will b...