Transfer Pricing Study

Transfer pricing is a long-standing problem, and the research of such problem is for a long time.Early in the 40s-50s of last century, people toke the problem of transfer pricing seriously ,gradually, especially in the economics theories.The most representative Mr.Hirshleifer (1956) used the principle of Microeconomics and built the Mathematics model. Some people got a theory that when the transfer pricing of intermediate product was equal to the marginal cost, the profit would be the biggest to the responsibility center. This is the pointed problem of transfer pricing. These years, the researches into the transfer pricing mainly focus on the aspect of Taxes. Developed countries and International organizations also mainly work for making laws and regulations of transfer pricing. For example, OECD made a series of reports of transfer pricing: TP Report 1979, TP Report 1984, TP Report 1995, all of these reports made a full explanation to the regulations of transfer pricing. Some developed countries like U.S, Europe and Japan, also made different rules to the Transfer Pricing Regulations which touched off a debate among these countries. On the contrary, there is little research of transfer pricing or the management and control system of company. It is mainly because of people having little knowledge about the affects in company of transfer pricing, and also having no full knowledge about how to use transfer pricing to manage the company's strategy and the means of evaluating individual performance.Our scholars started the research of transfer pricing as a new topic, a little late, we have made a series of regulations of transfer pricing, such as the Income Tax Law for Enterprises with joint venture and the Income Tax Law for Enterprises with Foreign Investment and Foreign Emterprises, etc., but there is few research into the status of company' strategy to transfer pricing. In the 1990s, the problem of company management rose, which brought the problem of how to manage enterprise coordinately by transfer pricing. Now, the state-enterprises are in the transition of...