Research On Tax Avoidance Of Transfer Pricing In China In The Globalization Of Economy

Following the globalization and integration of world economy, multinational investment has become common in the world economy. The multinational companies ("MNC") are playing an important role in the world economy and gradually become the core of the economic globalization. In the multinational operation, based on their advantages of production and marketing, the MNC make use of the differences of tax systems in different countries, and the incompleteness of tax laws and international tax laws to avoid or reduce the taxation through various legal measures, to get the large profit. This is called international tax avoidance, the typical way of which is transfer pricing. International tax avoidance hurts heavily the tax interests of some countries and reduces their financial income. It also causes the abnormal flow of international capital and leads to the disorder of international capital flow system and break the order of fair competence. As a result, many countries establish their transfer pricing tax system to prevent MNC from taking transfer pricing to avoid tax. The struggle between tax avoidance and anti-tax avoidance are becoming serious.Following China's opening to the outside world and entry into WTO, more and more MNC will come to China and develop this large potential market. On one hand, the foreign companies promote the economic development of China with advanced management experiences, talents and technology. On the other hand, some foreign enterprises take the way of transfer pricing to get the maximized profit and the minimized tax. This not only hurts the interests of Chinese investors, but also leads to the unfair competition between Chinese enterprises and foreign invested companies, which will even affect the normal international economic order.Introducing advanced anti-tax experience, learning advanced anti-tax measures, improving transfer pricing tax system in China to prevent MNC from tax avoidance and reduce its damage towards China, this is an important research program for China. There are five parts in this paper.Part I, briefly introduce the theory of tax avoidance of transfer pricing, analyz the reasons, ways, negative effects and current situation in China, compare the concepts of tax avoidance and tax evasion..transfer pricing is the key method to avoid tax.Part II, discus the negative impacts and the cause of the transfer pricing in china . make clear with the negative impacts of transfer pricing tax avoidance of MNC, analyz the transfer pricing tax system of China and find out the problems.Part III,studies the international society's contribution and learning of the theory of transfer pricing of tax avoidance. focus on anti-tax theory research of America and OECD, which will be more helpful for China's anti-tax avoidance and provide foundation for suggestions given in the last chapter of this paper.Part IV, put forward practicable suggestions on tax law making, tax system reform and tax collection and administration. for the purpose of improving China's transfer pricing tax system and increasing anti-tax avoidance power.The innovation point of this paper is that the author chooses transfer pricing tax avoidance and anti-tax avoidance as a research task, especially gives some suggestions for strengthening the control over the transfer pricing anti-tax avoidance in China.