On Chinese Advance Pricing Arrangements System

Advance Pricing Arrangements transfers the regulation on transfer pricing from post-modification mode to pre-confirmation mode, which embodies the balanced interests and identical opinions of the tax authority and taxpayer. It is the trend and result of the transfer pricing tax regime development. Nowadays, it has theoretical and practical necessities to study Advance Pricing Arrangements system. In respect of the theory, the studies on the transfer pricing tax regime lead to many valuable achievements, which do not include the researches and summaries on the theoretical basis of Advance Pricing Arrangements. As a result, it is not qualified for the Advance Pricing Arrangements theory to guide the practice of tax collection and administration in China. In respect of the practice, the experience of negotiating, signing, supervising and executing Advance Pricing Arrangements in our country is so limited that it is necessary for us to learn and then use the mature experience of the developed countries. Furthermore, it is possible to revise and supplement the implementing and administrating regulations of Advance Pricing Arrangements.Absolutely, World economy will be much opener in the twenty-first century, as well as Chinese economy. That means the opening in China will be wider and deeper. It is little wonder that more and more multinational corporations invest in China. As for the foreign investors, transfer pricing is a common way of tax avoidance, which will harm our national interests and should be supervised and forbidden. Unfortunately, the traditional transfer pricing adjustment doesn't work well, because it occupies many sources and is not good for attracting investments and funds. On the contrary, Advance Pricing Arrangements not only takes the taxpayers' legal interests into consideration, but also makes the collection and administration more convenient. In another word, Advance Pricing Arrangements guarantees the tax income and both the macro economy and investors can benefit from this system, while attracting foreign investments. Consequently, it is necessary to study the present situation, existed problem, developing trend of our Advance Pricing Arrangements system completely and systematically.As to the research method, this article is based on the fundamentals of western economics and classics of tax. It pays much attention to the combination of theory and practice, as well as the logic of the structure. By learning and using the predecessors' achievements, the objective law of the emergence and evolution of Advance Pricing Arrangements is proclaimed and demonstrated clearly in the paper, equipped with...