Research On Anti-tax Avoidance Of Transfer Pricing In Asset Restructuring Between Related Enterprises

Transfer Pricing is an important method for MNE inner resources allocation,and isalways change the tax resource distribution among countries of MNE's members,makinghome countries and host countries losing tax income. MNE making transfer pricingthrough asset restructuring, becomes a huge challenge for anti-tax avoidance. This paper,make China for example, use the concepts,methods and models in tax law, accounting,asset valuation, customs valuation and Statistics comprehensively,in order to researchanti-tax avoidance of transfer pricing in asset restructuring between related enterprisessystematically.Association relationship is the premise of transfer pricing. Besides relative law existed,the judging of association relationship needs the principle of stance over form and thespecific case. In the field of transfer pricing, the measuring unit hypothesis and reliabilitybecome unimportant, and the contents of asset are similar to these in economics. Assetrestructuring is closed, making the transfer of asset as key contents, and considering theimpact of the variation in contracts, liability restructuring, equity restructuring andpersonnel changes at the same time.The analysis of anti-tax avoidance, includes two aspects: the kind of asset transactionand the way of consideration. There are four kinds of asset transaction, individual assettransaction, package deal, asset group transaction and enterprises transaction, and fourdifferent ways of considerations, paid by monetary assets, non monetary assets exchange,assumption of debt and paid by equity. The different combination of asset transaction andconsideration, forms a perplexing pricing mechanism.The analysis of anti-tax avoidance in asset restructuring includes: contracts, thedistribution of risk between members, the respective compensation/pay-off, theremuneration after restructuring and uncomparable restructuring. All of them would impactthe transfer pricing in asset restructuring indirectly and the judgment result of arm's lengthprinciple. The professional database, customs valuation, tax base valuation and tax assessment,are four kinds of valuation tools in anti-tax avoidance. All of them exert different effect inanti-tax avoidance of transfer pricing. The professional database can provide lots ofcomparable data for tangible and intangible assets transactions. The customs valuationcan product useful conclusions, experience and methods to tax administrator. The tax basevaluation is suitable for intangible assets valuation, and obtain tax basis directly. The taxassessment should be used with contemporaneous documents, forming completeinformation of tax payers, provides industry analysis indexes and exerts warning functionfor anti-tax avoidance.APA is a new administration model for transfer pricing, and the in advance adjustmentcause low cost and high efficiency, which is advantageous to harmonious relationshipbetween tax administrator and tax payer. However, because of its inflexibility in keyassumptions, APA is not proper for the enterprises which will take part in restructuring.Through increasing new hypothesis on future restructuring and making several schemes,APA becomes more flexible and can be more properly for restructuring than before.According to the situation of anti-tax avoidance of transfer pricing in China, thispaper provide six suggestions in legislation and administration, there are: acceleration oflegislation, searching for new administration methods, arranging administration rights,organizing tax policemen team, promotion of informatization and expanding propagandaand training.