Transfer Pricing and Financial Performance: The Case of Algerian Companies

• Authors: Anissa Ouelhadj , Mehdi Bouchetara , Messaoud Zerouti

Title variants

PL

Ceny transferowe a wyniki finansowe: przypadek spółek algierskich

Abstracts

PL

Wzrost handlu międzynarodowego reprezentuje ponad 60% wzrostu gospodarczego. Spółki międzynarodowe, działające w ramach tej samej grupy kapitałowej, chcą zwiększać swoją rentowność, co skłania przedsiębiorstwa do ciągłego polepszania wyników finansowych. W artykule zbadano, czy ceny transferowe mają pozytywny i znaczący wpływ na wyniki finansowe grupy przedsiębiorstw w Algierii w okresie pięciu lat od 2016 r., przy zastosowaniu podejścia ilościowego z oprogramowaniem SPSS. Autorzy wykorzystali regresję oraz zmienne cen transferowych (obciążenie podatkowe, wielkość firmy i dźwignię finansową) na przykładzie wyników finansowych 60 spółek z grup kapitałowych działających w różnych sektorach. Wyniki pokazują, że ceny transferowe mają znaczący i pozytywny wpływ na te przedsiębiorstwa przy 10-procentowym marginesie błędu, mimo że tylko wielkość firmy ma istotny pozytywny wpływ na ROA tych spółek w Algierii, przy błędzie marginesu wynoszącym 1%. Autorzy doszli jednak do wniosku, że im większa firma, tym większą uwagę powinna zwracać na swoje ceny transferowe i składane deklaracje, aby uniknąć korekty podatkowej, która mogłaby pogorszyć jej wyniki finansowe.

EN

The increase of international trade represents more than 60% of the international economy, which is more profitable within the same group, thus prompting the continuous search for satisfactory financial performance by companies. This paper investigates whether transfer pricing has a positive and significant impact on corporate group's financial performance in Algeria, over a period of five years since 2016 with a quantitative approach and SPSS software. The authors tested the regression of transfer pricing variables (tax burden, firm size and leverage) with the financial performance of 60 companies of corporate groups operating in different sectors as a research sample and found that transfer pricing has a significant and positive impact on those companies at 10% error margin, despite the fact that only the company size has a significant positive impact on ROA of these companies in Algeria, with a margin error of 1%. However, the authors concluded that the bigger the company, the more it should pay attention to its transfer prices and their declarations to avoid any tax adjustment which can hinder its financial performance.

Keywords

EN

transfer pricing; financial performance; corporate groups

PL

ceny transferowe; wyniki finansowe; grupy kapitałowe

• Publisher: Wydawnictwo Uniwersytetu Ekonomicznego we Wrocławiu
• Journal: Nauki o Finansach
• Year: 2023
• Volume: 28
• Issue: 1
• Pages: 32-46

Dates

published

2023

Contributors

author

Anissa Ouelhadj

• Financial Auditor at PwC Algeria

author

Mehdi Bouchetara

• Higher National School of Management

author

Messaoud Zerouti

• Higher National School of Management

References

• Abkar, Y., Aajly , A. (2020). Transfer pricing determinants in associated companies in Morocco. Journal of Studies and Research in Logistics and Development (RERLED), 5(9), 138-156.
• Aissat, A., & Mokrani, A. (2018). The impact of taxation on the location strategies of multinational companies. Journal of Economic Reforms and Integration in the World Economy, 1-20.
• Al-Matari, E. M., Al-Swidi, A. K., & Bt Fadzil, F. H. (2014). The measurements of firm performance's dimensions. Asian journal of finance & accounting, 5(1), 24-49. doi:10.5296/ajfa.v6i1.4761
• Azzura, C. S., & Pratama, A. (2019, Janvier). Influence of taxes, exchange rate, profitability, and tunneling incentive on company decisions of transferring pricing. Jurnal Akuntansi Berkelanjutan Indonesia, 2(1), 123-133.
• Baroroh, N., Suryani, M., & Jati, K. W. (2021). The role of profitability in moderating the factors affecting transfer pricing. Accounting, 7, 1203-1210. doi:10.5267/j.ac.2021.2.018
• Benkendil, H., & El Ghazali, M. (2018, June). Tax optimization for groups: What is the impact of transfer pricing and tax consolidation on financial performance in Morocco? Accounting and Auditing Review, (5), 620-641.
• Bouazzama, Y. (2021). Choice of financing and financial performance of the company. Journal of Social Sciences and Organization Management, 2(2).
• CDTST. (2022). Retrieved from General Tax Directorate (DGI).
• Devita, H., & Sholikhah, B. (2021). The determinants of transfer pricing in multinational companies. Accounting Analysis Journal, 10(2), 17-23. doi:10.15294/aaj.v10i2.45941
• DGE. (2022). Directorate general of large enterprises. Retrieved from https://www.mfdgi.gov.dz/
• Dwianika, A., & Ahmad, R. (2021). Tax avoidance practices in Indonesia: The impact of transfer pricing, profitability, and institutional ownership in mining companies. Proceedings of the 5th International Conference on Sustainable Innovation (ICOSI), 1-8.
• Fazriah, L. T., Alvina, N. S., & Nryaman. (2022). The influence of profitability, leverage, and firm size on company decisions to practice transfer pricing. Central Asia And The Caucasus, 23(1), 3172-3179. http://doi.org/10.37178/ca-c.23.1.216
• Fellag, H. (2017). Diversification of the economy: a way forward for Algeria. Djadid El-iktissad Review, 11.
• Gargouri, S. (2014). Transfer pricing in North African countries. Intertax, 42(4), 290-292.
• GMT. (2020). Order of November 17, 2020, determining the companies concerned by the initial and additional documentation, justifying the transfer prices applied by the affiliated companies. 02.
• GMT. (2022). General management of taxes. Retrieved from https://www.mfdgi.gov.dz/
• Kasztelnik, K. (2020). Causal-comparative macroeconomic behavioral study: International corporate financial transfer pricing in the United States. Financial Markets, Institutions and Risks, 4(1), 60-75. Retrieved from http://doi.org/10.21272/ fmir.4(1).60-75.2020
• Mangers, D. (2022). Transfer pricing news and information. (A. Ouelhadj, Intervieweur).
• Nazihah, A., Azwardi, & Fuadah, L. (2019). The effect of tax, tunneling incentive, bonus mechanisms, and firm size on transfer pricing (Indonesian evidence). Journal Of Accounting, Finance and Auditing Studies, 5(1), 1-17. doi:10.32602/jafas.2019.0
• Nurwati, Prastio, & Kalbuana, N. (2021). Influence of firms size, exchange rate, profitability and tax burden on transfer pricing. International Journal of Economics, Business and Accounting Research, 967-980. Retrieved from https://jurnal.stie-aas. ac.id/index.php/IJEBAR
• OECD. (2022). OECD transfer pricing guidelines for multinational enterprises and tax administrations.
• Officiel, J. (2013). Order of April 12, 2012, on the documentation justifying the transfer prices applied by related companies.
• Officiel, J. (2020). Order of November 17, 2020, determining the companies concerned by the initial and additional documentation, justifying the transfer prices applied by the affiliated companies.
• Osho, A., & Olayemi, I. F. (2020, March 31). Influence of transaction transfer pricing policies on corporate organizations tax in Nigeria. Research Journal of Finance and Accounting, 11(6), 58-66. doi:10.7176/RJFA/11-6-07
• Osho, A., Soynika, K., & Oluwafemi, N. (2021). Transfer pricing evaluation and financial performance of selected listed multinational corporations in Nigeria. Fuoye Journal of Accounting and Management, 4(1), 108-122.
• Ouelhadj, A., & Bouchetara, M. (2021, September 13). Contributions of the base erosion and profit shifting BEPS project on transfer pricing and tax avoidance. Financial Markets, Institutions and Risks, 5(3), 59-70. Retrieved from https://doi. org/10.21272/fmir.5(3).59-70.2021
• Rizkya, Y. S., & Isnalita. (2020). The determinants of transfer pricing intensity of multinational non-financial firms in Indonesia. Cuadernos de economia, 43, 435-441. Retrieved from https://doi.org/10.32826//cude.v4i123.406
• Sam, H. (2017). Improving financial inclusion and accessibility to banking and financial services: The case of Algeria. Critical review, 40-55.
• Samhane, S. (2018). Understanding transfer pricing in the Moroccan context. Public & Nonprofit Management Review, 3(1), 318-328.
• Sari, D., Hermawan, A., & Fitriana, U. (2021). Influence of profitability, company size and tunneling incentive on company decisions of transfer pricing (empirical studies on listed manufacturing companies indonesia stock exchange period 2012- -2019). Turkish Journal of Computer and Mathematics Education, 12(4), 796-805.
• Tjandrakirana, R., & Ermadiani. (2019). Factors that influence companies to transfer pricing. Advances in Economics, Business and Management Research, 142, 376-384.
• TPC. (2022). Retrieved from https://www.mfdgi.gov.dz/
• Widjaja, G. (2021). Impact of transfer pricing toward benefits and sustainable multinational hotel industry. Linguistics and Culture Review, 5(S4), 2090-2101. Retrieved from https://doi.org/10.21744/lingcure.v5nS4.1927
• Winarto, W., & Apollo, D. (2021, May 25). Can this capitalization and transfer pricing activities reduce the tax burden? Dinasti International Journal Of Economics, Finance And Accounting, 2(1), 121-131. Retrieved from https://doi.org/10.38035/ dijefa.v2i1

Identifiers

DOI

10.15611/fins.2023.1.03

Biblioteka Nauki

16474181