TRANSFER PRICING. THE TAXPAYER'S RIGHT TO BE HEARD
TRANSFER PRICING. THE TAXPAYER'S RIGHT TO BE HEARD

Author(s): Natalia Șvidchi
Subject(s): Economy, Law, Constitution, Jurisprudence
Published by: Editura Universităţii »Alexandru Ioan Cuza« din Iaşi
Keywords: transfer pricing; legal framework; adjustment; estimation; right to be heard
Summary/Abstract: Transfer pricing represents a challenge both for the taxpayer and the tax administration. As transfer pricing cases have increased in Romania over the past few years, legal practitioners must face the task of understanding the rationale of the inherent functional and economic analysis, which is far from being exact and straightforward, but rather increasingly interpretative and highly challengeable.In this paper the author provides a brief presentation of the arm’s length principle and of the current legal framework in Romania, followed by a theoretical analysis of the taxpayers right to be heard during transfer pricing tax inspections accompanied by two cases from practice.The author’s conclusion is that, considering the specificity of transfer pricing, the tax inspection has the obligation to inform the taxpayer during the tax inspection whenever it intends to make an adjustment or an estimation of the transfer prices. Moreover, prior to making any adjustments or estimations, the tax administration has the obligation to request from the taxpayer additional explanation and information in writing.

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