Transfer pricing regulatory mechanisms in the United States of America and the United Kingdom

Abstract

In the context of contemporary economic globalization, transfer pricing is gaining increasing significance as one of the key issues of international taxation, exceeding the exclusive regulatory capacity of individual states. The active integration of national economies, the expansion of transnational corporations’ activities, and the advancement of digital technologies have intensified the challenges related to profit shifting to low-tax jurisdictions. In response to these challenges, the international community, with the participation of OECD and G20 countries, initiated the development of the BEPS (Base Erosion and Profit Shifting) Action Plan, which aims to introduce unified approaches to tax transparency and the prevention of aggressive tax planning strategies.

This article analyzes the regulatory mechanisms of transfer pricing in the United States and the United Kingdom - countries with well-developed tax systems that actively implement the BEPS provisions. The study examines the legal frameworks, fundamental principles, and control mechanisms, particularly with regard to documentation requirements, Country-by-Country Reporting, and the arm’s length principle for related-party transactions. Special attention is paid to comparing the approaches of these two jurisdictions in implementing international standards, especially the OECD Guidelines, to identify commonalities and differences.

The use of analytical, comparative, and generalization methods made it possible to comprehensively consider both formal and substantive aspects of tax and legal control, which is essential for the accurate identification of related parties within the transfer pricing regulation framework.

The conclusions drawn outline effective regulatory practices that can be considered in Ukraine during the enhancement of its national tax policy amid global competition and the imperative of ensuring fair taxation.