A Study On Transfer Pricing Of Multinational Corporations

After World War Two, the multinational corporation massively emerges, and is playing a vital role in the world economic stage day by day, which is a remarkable characteristic in current world economy. Nowadays, with the process of world economic integration gradually speeds up, Multinational Corporation's management strategy and behavior receive universal attention of various countries. Among that, Multinational Corporation's transfer pricing is the focus, which have strong value of research and practice.Specially after joining WTO, our country obtains great achievement in attracting foreign investment with reform and opening. More and more multinational corporations pour into our country in various forms as sole ownership, joint venture, cooperation, branch, etc. The pouring of the multinational corporations makes indelible contribution to the social and economic development of our country. But while affirming the achievement, we cannot ignore the negative effects of involving international payment, capital circulation, tax revenue and related effect, which is caused by multinational corporations' transfer pricing based on their own strategic benefit consideration. This article has analyzed the transfer pricing behavior of our multinational corporations and proposed some medium and long-term suggestions to reach a win-win case for how to organize transfer pricing.In recent years, while " introducing ", enterprises of our country are stepping up to implement the 'Go-Out policy". A number of outstanding Chinese enterprises begin to go abroad, developing into great influential international company gradually. Facing the wider and more complicated international market, how the multinational corporations of our country apply transfer pricing rationally to reach our own strategic objective is one of the goals of this article too.The introduction of this thesis has elaborated the research motivation, goals and methods as well as value and limitation. Chapter one mainly introduces the connotation of transfer pricing and study the tax and non-tax motive of multinationalcorporations' transfer pricing. Chapter two analyses rationality of transfer pricing existence under the theory background of market internalization and transaction cost, at the same time it point out there is limits of substituting market price which are determined by the cost of transfer pricing. Chapter three analyses characteristic, reasons and negative effects of foreign-investment enterprises' transfer pricing in our country and propose some medium and long-term suggestions for management and control. Chapter four probes how to apply transfer pricing reasonably to reach our strategic goals for our national enterprise in trans-nation business.