Transfer Pricing Management in the Context of Digitalization

Abstract

The article examines the current issues of transfer pricing management in the modern context, particularly in light of the digital transformation of Ukraine’s tax and customs authorities. It is proven that Ukrainian legislation contains significant shortcomings, especially the terminological conflict between the Net Profit Method, as defined in the Tax Code of Ukraine, and the Transactional Net Margin Method, established in OECD Guidelines. This creates legal uncertainty, increases tax risks for businesses, and complicates international cooperation.

The study analyzes the impact of digitalization processes, including Ukraine's accession to mechanisms such as the CbC MCAA, CRS MCAA, and the implementation of the NCTS system, on transfer pricing control and access to reliable comparable data. The scientific novelty lies in the comprehensive analysis of the interrelation between the digital transformation of fiscal authorities and the effectiveness of transfer pricing regulation, as well as in the proposals for harmonizing Ukrainian legislation with international standards.

Among the practical outcomes of the research:

• main challenges in applying TNMM in Ukraine are identified;
• internal policy recommendations for transfer pricing are proposed.
• the importance of functional analysis, comparability adjustments, and regular updates to pricing models is substantiated;
• practice-oriented recommendations are provided for enterprises on documentation, tested party selection, and profitability indicators.

The findings can be used to improve national legislation in the field of transfer pricing, to develop internal tax optimization policies, and to conduct regular audits of pricing strategies, especially in cases of capital structure changes and shifts in business conditions.