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Analysis of specific instruments applied in the financial management of TNC with a focus on transfer pricing
Baluchová, Daniela ; Taušer, Josef (advisor) ; Sato, Alexej (referee) ; Baláž, Peter (referee)
Transfer pricing plays a crucial role in the financial management of TNC as it significantly influences revenues and costs allocation among affiliates of TNC that are located in countries with different tax regimes, interest rates, political situation and economic environment. Recently, transfer pricing is scrutinized in respect of tax minimisation strategies adopted by TNC which raises various conflicts of interest with tax authorities in some countries of their presence. The main objective of the dissertation thesis is to provide a comprehensive empirical study on international transfer pricing in the Czech Republic from the perspectives of both taxpayer and the tax authority. With regard to the complexity of transfer pricing, manufacturing afiliates of TNC located in the Czech Republic were selected to be examined in more detail. The thesis is structured into five chapters. The first chapter defines theoretical framework based on which the analytical part of the thesis is elaborated. The strategies applied by TNC in setting transfer prices are strongly affected by the transfer pricing regulation and interpretative experience of the particular countries in which they operate. In this context, the Czech transfer pricing legislation as well as selected case law is analyzed in the second chapter. Given the complexity of the issue of transfer pricing, the third chapter deals with selected aspects that are considered critical when setting transfer prices. The fourth chapter presents key findings regarding transfer pricing strategies applied by TNC located in the Czech Republic to transfer pricing issues. The fifth chapter summarizes the approach of the Czech tax authorities to the transfer pricing audits and at the same time evaluates related risks borne for taxpayers in this respect. The thesis reveals that manufacturing afiliates of TNC located in the Czech Republic generally prefer non market (cost based) transfer pricing methods when setting transfer prices, whereby there are several factors influencing their decision making, out of which internal economic conditions and foreign exchange risk management are deemed the most important factors, while tax optimisation as well as restrictions on profit repatriation are considered relatively less important factors. The study further indicates certain inconsistency between declared functional and risk profiles and decision making competences. In this connection, it was found out that the Czech afiliates in which the foreign parent company is involved in transfer pricing set-up incur tax losses. In response to the increasing importance of transfer pricing and international initiative Action Plan BEPS (Base Erosion and Profit Shifting) it can be stated that the approach of the Czech tax authorities has become more intensified and sophisticated. The Czech tax authorities challenge declared and actual functional and risk profile of taxpayers as well as economic substance of realized intercompany transactions. Furthermore, number of transfer pricing audits has increased and become targeted on risky taxpayers such as companies granting investment incentives or incurring tax losses etc. As a result, additional tax assessment due to incorrect transfer pricing significantly increases over recent years.
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Assessment forms of collateral payments and exchange rate risks for companies in selected sectors
Hrazdíra, Adam ; Pavlík, Zdeněk (advisor) ; Baluchová, Daniela (referee)
This bachelor thesis deals with the problem of securing payments and exchange risks in international trade. Financial derivatives, documentary letters of credit and documentary collection were selected as the main financial instruments for hedging. The aim of this work is to choose the most appropriate combination of these instruments for companies in a particular sector and economic areas. The second part of this thesis focuses on the Czech engineering company that uses all these financial instruments listed above for hedging. The company's strategy for exchange and payment security will be presented, based on the data of analysis. Following this strategy recommendation arises for other companies in this sector.
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Options of business result optimization in a globalized economy
Vencovská, Kateřina ; Černohlávková, Eva (advisor) ; Baluchová, Daniela (referee)
This diploma thesis deals with selected methods that large companies can use to optimize their business results in the international environment. It focuses namely on methods of outsourcing, offshoring, tax optimization and cash flow management. The first part briefly describes globalization in the world economy and transnational corporations as its major players. The next two chapters are devoted to strategies which lead to cost reductions of enterprises due to outsourcing and offshoring. The fourth part characterizes the way offshoring enters into foreign markets in the form of foreign direct investments. The fifth section deals with tax optimizations for multinational companies. The sixth part mentions the measures taken so far in the area of tax coordination in the world and in particular the European Union and the last chapter briefly defines various options which can be used for cash flow optimization.
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Comparison of the monetary policy of the FED during the 1930s and during the Great Crisis
Pospíšil, Lukáš ; Pavlík, Zdeněk (advisor) ; Baluchová, Daniela (referee)
The following bachelor thesis deals with the comparison of the decisions made by the American central bank before and during the period of the Great Depression and the Great Crisis while taking into account several points of view. In order to provide thorough understanding to the reader the first part is about the characterization of the origins of the central banking from the perspective of an representative of the Austrian School of economics Rothbard, the second part is about the organizational structure of the FED. The third chapter compares the politics of the FED before the particular crisis. The core of the thesis lies on the thoughts of Bernanke the present chairman of the FED, who is known due to his study on the Great Depression. It ensures that we better understand the current attitude of the FED. Chapters 4 and 5 evaluate the cause of the very crisis.
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Bank guarantees in international trade
Šebesta, Ondřej ; Nejedlý, Michal (advisor) ; Baluchová, Daniela (referee)
This thesis deals with the security instrument known as a bank guarantee which is becoming more popular nowadays not only in international trade, but also at the domestic level. The aim of the thesis is to introduce the topic of bank guarantees in the light of theoretical and then practical aspects. After the initial description of bank guarantees and putting forward various international uniform rules the thesis deals, in its second chapter, with different types of bank guarantees. The third chapter pays attention to support of export of the Czech Republic through bank guarantees and their insurance with state support. An important part of the thesis is also a comparison of claims resulting from authorised or unauthorised drawing on the guarantee.
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The possibilities of the use of offshore centres within Czech non-profit organizations’ activities
Dušková, Michaela ; Nejedlý, Michal (advisor) ; Baluchová, Daniela (referee)
This bachelor thesis deals with the possibilities of the use of offshore financial centres within Czech non-profit organizations' activities. The work is divided into three chapters. The first chapter is dedicated to the description of non-profit sector in the Czech Republic and its development, as well as to the main types of non-governmental non-profit organizations and the issues of their profit taxation. The second chapter deals with offshore financial centres with the concentration on the opportunities offered to the Czech non-profit organizations. The final chapter is dedicated to the analysis of the decision-making process while choosing the locality for founding an offshore foundation by a specific Czech non-profit organization. In this chapter the states of Panama, Liechtenstein and Austria are compared.
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Strategy of a chosen company entering the foreign market
Výrostková, Lucia ; Černohlávková, Eva (advisor) ; Baluchová, Daniela (referee)
The main idea of this thesis is a current strategy of a firm Applied Meters a.s., operating in the energy sector,in entering foreign markets, especially on the Columbian market, and emphasising the market expansion and prospects in the future. This work points out a business environment in Columbia, as a country with a great potential for foreign companies.The work also refers to complete process from production to delivery to the final customer.
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