The Transfer Pricing Of Intangible Assets Based On The Taxation

Transfer pricing is one of the main problems of international tax. It involves not only the communication and coordination between taxpayers and tax authorities, but also the coordination and distribution of related interests between national tax authorities, hence affects the various interests. With the integration of the world economy and the further development of multinational companies, this phenomenon becomes more general on a global scale. Thus each country is putting more emphasis on transfer pricing tax legislation to the internal trade of associated enterprise. On this issue, the United States and other developed countries have a lot of experiences, both theoretical and practical. China's laws and regulations system are still not perfect enough to prevent the transfer pricing, let alone to provide relevant measures. Thus it's necessary for us to learn from the advanced experiences and make necessary improvement.As far as the transfer pricing issues are concerned, because of the special nature of intangible assets, it's more easily hidden and difficult to find the intangible assets transfer pricing. In the internal transactions of multinationals, the share of intangible assets transactions has been rising. On the other hand, the value of intangible assets in the proportion of corporate assets has also increased. Thus the intangible assets transfer of the ownership or the right to use has got more and more attention of the related enterprises like transnational corporations. Currently intangible assets transfer pricing issue has become increasingly hot issue in both theory and practice.This paper, based on the analysis of two aspects of intangible assets and transfer pricing, draws forth the characteristics, forms of the transfer pricing of intangibles assets. Then tax issues are discussed and the applicability of the arm's length principle in transfer pricing of intangible assets is affirmed. On the transfer pricing method, the method applied to tangible assets also can be applied to intangible assets under certain circumstances. On the other hand, the setting of the arm's length price of intangible assets in the United States internal revenue code also has its representation. In addition, the application of the cost sharing agreement and advance pricing agreement are better ways to deal with intangible transfer pricing issue, thus are the future direction in this area. In the last part of this paper, the development and the actuality of China's intangible transfer pricing system are introduced. And compared with the relevant provisions of the United States and OECD, a lot of inadequacies and loopholes in our country are pointed out. Therefore, for the sake of our national tax benefits, it's necessary to make up for inadequacies in the legislation and the collection procedures and make effective control of transfer pricing of intangibles assets accordingly.