On The Advance Pricing Agreement In China

Since 1990s, in order to perfect the defection of transfer pricing management system, the countries with the US as an outstanding representative have designed and introduced a new system, known as advance pricing agreement or advance pricing arrangement. The advance pricing arrangement program is a breakthrough to the traditional tax pricing management system, which is designed to deal with the internal transaction in the relevant businesses. With the implementation of a set of principles and the agreement reached among the countries, multinational taxpayers and tax collecting authorities, the agreement works to settle the conflicts and disputes over the transferring pricing arrangement, reduce the management cost, improve the efficiency and quality, and raise the taxpayer's duty observation awareness. The final goal of the agreement is to strengthen anti-tax avoidance managing ability, which will help to uphold a nation's sovereignty and avoid repeatedly duty levy internationally. The paper learning from the international practical experience about the program, applying standard comparison and analysis methods, and based on the theories of administration agreement and tax observation, analyzes the status quo of the agreement, discusses and studies its development and perfection in China. The paper is divided into 3 parts:Part one deals with the rise of advance pricing agreement and its theory basis, the conception and the principles.Part two deals with the international comparison of the agreement, and takes the US, Canada, Australia, Britain, Holland, Japan ect. For Example.Part three deals with a tentative idea as to develop and perfect the advance pricing agreement in China.It is believed that the agreement is still on an early stage of application in China and should be introduced and studied widely.