Tax Study On Transfer Pricing Of Intangible Assets

Transfer pricing is the most biggest tax issue faced by MNCs nowadays .And it is one hot-spot topic in the field of international taxation .Accompanied with the development of knowledge economy ,many MNCs make uses of the characteristics of intangible assets such as scarceness and uncertainty ,and frequently engage in inter-company trade. These behaviors have badly infracted the interest of local governments and at the same time have brought much puzzle to the local tax administration departments. Thus, it is quite necessary to strengthen the management of internal transactions of intangible assets and prevent revenue loss.The United States is the world's pioneer in the transfer pricing legislation . Section 482 of IRS has detailed rules about transactions of intangibles involving the transfer pricing .Also, Chapter 6 in OECD guidelines has separately consider the particularity of intangible property . The management system of transfer pricing about tangibles is relatively mature in China .However ,the management of transfer pricing about intangibles drops behind .This paper begins at the special feature. of intangible assets ,and then illuminate how these characteristics impose influence on tax management .The second part of this article try to simulate the status quo of transfer pricing issues ,and discuss the effects of different pricing methods .The other method in this paper is comparison which try to analyze the regulations between US and OECD guidelines .On this basis ,we may give some advice about how to improve the legislation of transfer pricing of intangibles .