Multinational Enterprise's Transfer Pricing And Relevant Tax Audit

Transfer pricing is the most important method for multinational companies to transfer profits. Along with the increasing number of multinational corporations will be set up and developing in China, We should pay more attention to multinational companies who damage the tax basis of China by transfer pricing. Although China has already set up the transfer pricing system, there are still large gaps when compared with Western countries.In this paper, it starts from the basic concept, from the surface to the deep. It takes the theoretical knowledge of transfer pricing tax system as beginning. I discuss the problems which the transfer pricing tax auditing have and give proposals to improve them by analyzing the steps, processes and methods of the transfer pricing auditing in tax authorities'practice.