Kiril Angelov, Desislava Yosifova
Abstract: In international practice, there is an exceptionally large number of transactions between related parties. Despite the defined rules and possible ways for determining the prices of goods and services between related parties, it is reasonable and pragmatic to work toward creating and building upon improved approaches that ensure better operational efficiency, tax certainty, and, consequently, the simplification and acceleration of audits and controls. In this context, there is a need to develop reliable and efficient methodological approaches that facilitate and accelerate the processes characteristic of transfer pricing. This creates the conditions for reducing the risk of errors, both for companies and for tax authorities. The development of effective methodological approaches, as the objective of this study, would have significant dual utility and practical value: on the one hand, for the purposes of tax planning and tax optimization from the perspective of the economic interests of commercial companies that are related parties, share common business objectives, and enter into commercial transactions with one another (in particular, those involving real estate), while at the same time ensuring that they do not undermine the public and fiscal interests of the relevant tax jurisdictions.
Key words: related parties; real estate; transfer pricing; optimization models.
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