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Research On Advance Pricing Agreements And Its Application In China

Posted on:2005-05-04Degree:MasterType:Thesis
Country:ChinaCandidate:Z LuoFull Text:PDF
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Multinational companies are becoming more and more important of the economic globalization. In this case the international tax avoidance takes place where the most typical way of tax avoidance is transfer pricing commonly used by the multinational corporations .At present, tax bureau mainly audit and adjust afterwards, During this course, it made method procedure complex, enormous work, and collect evidence difficultly not only increase the tax bureau burden but made the taxpayers feel inconvenience. It is one of the most complicated problems in international taxation.An advance pricing agreement is an agreement that the taxpayer report an understanding on the transfer pricing methodology in advance of controlled transactions, to be applied to one or more tax authorities that approves a transfer pricing methodology for a given term, resolving the uncertainty about its acceptability and reducing audit risk. It is a new type of method of solving the transfer pricing problem in tax regulation.With the continuous opening-up of China toward the outside world, especially after its entry into WTO, more and more multinational corporations will be coming to China for the large potential market. These foreign investment enterprises often declare that they are general debility, but they always increase capitals at the same time. Most multinational corporations in China are the associated companies of the multinationals, which conduct large amount of commodities trading, exchanges of technology, labor and fund,with their associated companies. Such practice not only infringes the interests of the other investors and causes the loss of tax revenue of our country, but also results in the unfair competition among the multinational corporations in China, produces the false image of a poor investment environment in China and further affects the foreign capitals into China. However, our tax laws of anti-avoidance in transfer pricing is still at the very initial stage thus inevitably has various defects such as lack of comparable index, re-sale price method, cost-plus method, etc. Therefore, it is an important subject for our country to issue a perfect law of advance pricing agreement.
Keywords/Search Tags:Advance pricing agreement, Transfer pricing, International tax avoidance, Multinational corporations, Associated enterprises, International taxation
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