Transnational related companies are allowed to settle border-crossing internal obligations by use of transfer prices. For related companies, it is assumed that internal business relationships are not determined predominantly by the competing interests normally prevailing between unrelated third parties. Since transfer prices affect the tax burden in individual countries, the problem arises of the appropriateness of transfer prices between cross-border related companies. This study primarily aims to provide an overview of transfer prices in the international context. It focuses in particular on their configuration respectively in Germany and in the Russian Federation.
To sum up, it can be stated that the transfer pricing rules in Germany and the Russian Federation are based on the OECD’s recommended transfer pricing rules. However, when it comes to their specific elaboration, both countries partially diverge from them. In both countries, the arm’s length principle is established as the key standard for evaluating the appropriateness of transfer prices both in the international and national context.Intertax