The Study Of The Foreign-investment Enterprise's Transfer Pricing In China

The research of this paper regarding to our country's low tax rate, the foreign-investment enterprise still shifts be-tax return abroad seriously, this phenomena is not in accordance with classical transfer pricing theory. This contradiction is as a thread, Through the data analysis of the macroscopical level and demonstration, This paper focus on the transfer price general conditions, motive, mechanism, effect and its management. It make a rational explanation why foreign investor shift be-tax return from low tax rate to high tax rate.The writing of this text divides five chapters altogether. Chapter one the introduction and retrospect the classical theory of transfer pricing. Main content includes the research object and range of this text, theoretical foundation and classical model that explain transfer pricing produces, The purpose to transfer price and main means, transfer price classification and its main influence factor etc.. Chapter two Demonstration of the foreign-investment enterprise in China transfer pricing. First of all, compare foreign trade turnover and trade balance whole country to foreign-investment enterprise's foreign trade turnover and trade balance during the past ten years, compare national industrial and commercial tax revenue rate of increase to foreign-investment enterprise industrial and commercial tax revenue rate of increase, compare the main economic benefits index of national industrial enterprise to main economic indicator of industrial enterprise of foreign- investment enterprise, compare the increase rate of investment of foreign- investment enterprise to range of loss of foreign-investment enterprise, etc.. Through these contrast analysis, we can prove that the foreign-investment enterprise in China really has problem of serious transfer pricing. Secondly choosing data of income tax rate in investment country, investment fund added, import and export according to every country, Demonstrate analysis and have proved that the main form in which the foreign-investment enterprise of our country transfer pricing is not that the trigonometry evades duty, but shift profits directly to its mother company. This phenomenon is unable to explain with the theory of evading payment of duty of transfer pricing. So author inference main purpose of transfer pricing foreign-investment enterprise in China is not to evade payment of duty. Chapter four model analysis of transfer pricing. According to the actual conditions of the foreign-investment enterprise in China, consulted the scholar's relevant research approach in the past, set up enterprise's model of a pair of the upper corporations. The two kinds of analytical methods of difference analysis and of marginal analysis are used in this paper, regarding realizing the global after-tax profit to maximize as goal function, analyze the transformation pricing behaviors of enterprises in the model. Firstly, not considering tax revenue and local market competition, annexing Chinese cooperator profit is the main motive of transfer pricing. And the greater the Chinese stock, the stronger the motive to shift return oversea. Then add the local market competition and tax revenue factors deepen the analysis of models. Study the investment enterprise transfer pricing under three kinds of different tax revenue protocol systems. We prove that its effect factors include income tax difference between two countries, tariff, foreign side's stock right, tax allowance degree of our country etc.. It is not primary goal that the global burden of taxation minimizes. If profit (trade income) annexing of cooperator is higher than payment decreasing of tax through shift be-tax return to low tax rate country, the trans-corporation will not turn the profit to the low tax rate country. Chapter four the international comparison and reference of the transfer price tax system. Main content of chapter is OECD, U.S.A, Japan's transfer pricing tax system comparison and brief introduction, the main problem of transfer pricing tax system and how to perfects it in our country...