FEATURE PEER-REVIEWED ARTICLE

• TRANSFER PRICING RISK WITHIN AUTOMOTIVE INDUSTRY IN THAILAND

  Paranyu Vitanakorn, Sillapaporn Srijunpetch (Thammasat Business School, Thammasat University, Bangkok, THAILAND).
  

  Disciplinary: Management Science (Pricing Risk Management) and Tax Management Strategies.

  ➤ FullText

  DOI: 10.14456/ITJEMAST.2020.224

  Keywords: Tax risk assessment; COSO ERM 2017; OECD; BEPS Actions; Transfer pricing risk factors; Transfer pricing risk mitigation; Intellectual Property (IP); Advance Pricing Agreement (APA).

  Abstract
  The purpose of this study is to assess transfer pricing risk within the automotive industry in Thailand based on COSO ERM 2017; identifying transfer pricing risk, prioritizing risk by rating its severity, and developing appropriate risk response to mitigate risk. The findings and results of this study show that there are five potential key transfer pricing risks sorted by the severity of risk in descending order from intellectual property, profit allocation in accordance with the risk-bearing function and capital, high-risk transaction related to service, arm's length price calculation, and pricing policy and interest. The most efficient and sustainable method to mitigate risk is to understand the business so that the most suitable pricing policy can be selected and embedded into the business plan. In addition, all firms should anticipate auditing from the Thai Revenue Department by regularly reviewing the pricing policy. Another effective risk response for the companies with changes in functions or business structure is to agree on the profit range and pricing policy in advance with the Thai Revenue Department. It is called the Advance Pricing Agreement.
  

  Paper ID: 11A11T

  Cite this article:

  Vitanakorn, P., Sillapaporn Srijunpetch, S. (2020). TRANSFER PRICING RISK WITHIN AUTOMOTIVE INDUSTRY IN THAILAND. International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies, 11(11), 11A11T, 1-11.