The influence of international offshore jurisdictions on the pricing strategy

Keywords: offshore zones, pricing mechanism, affiliates, transfer prices


The article analyzes the causes of offshore jurisdictions and identifies the effects of offshore on national economies. An analysis of the implementation of export-import operations carried out by offshore companies in order to influence the pricing process. The pricing mechanism with affiliates within offshore jurisdictions was presented. It was substantiated the role of offshore banks in the implementation of the pricing mechanism. It was presented the pricing mechanisms within offshore jurisdictions. It has been made an analysis of the impact of transfer pricing within offshore jurisdictions. It was substantiated the economic mechanism of pricing. The international experience of regulation of offshore jurisdictions and the system of controlling the operations of affiliates was analyzed. It was substantiated the mechanisms of functioning of offshore zones and companies operating in offshore jurisdictions.

The relationship between agreements concluded within offshore jurisdictions in the following areas is established and substantiated: the agreement is concluded between two independent companies in case of underpricing; the agreement is concluded between the companies connected with the capital relations (affiliated companies) at understatement of the price; agreements between two independent companies in case of overpricing; agreements between affiliated companies in case of overpricing. It was justified the use of the transfer pricing mechanism within offshore jurisdictions. Transfer prices allow you to withdraw capital from the country, as well as hide the profits of companies from taxation. The following ways of minimizing taxation are systematized: registration of a company that concentrates profits in a jurisdiction with lower taxation; concentration of profits in companies that are unprofitable according to management accounting; the use of front companies as sales companies in which profits are concentrated; non-payment of taxes as a result of illegal liquidation of the enterprise - the taxpayer, where the profit is concentrated. The basis of tax minimization is the use in the transaction of a price that deviates from the market.

Author Biographies

Оlena Chukurna, State University «Odessa Polytechnic»

Doctor of Economics sciences, Professor of marketing department

Larysa Radkevych, State University «Odessa Polytechnic»

PhD, Associate Professor, Marketing Department

Liliya Rudyk, State University «Odessa Polytechnic»

Student, Marketing Department


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How to Cite
ChukurnaО., Radkevych, L., & Rudyk, L. (2021). The influence of international offshore jurisdictions on the pricing strategy. VUZF Review, 6(4), 79-90.

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