Research On Legal System Of Tax Information Exchange In Reservation Pricing Arrangement

With the rapid development of international investment, multinational corporations tend to evade tax through transfer pricing between affiliated enterprises, which would cause a huge tax loss for relevant countries. Advance pricing arrangement could change transfer pricing, an afterwards adjustment method, into preconcerted agreement, thus benefiting the increment of tax certainty and mitigating the conflict of interest between corporations and tax. Therefore, fostering advance pricing arrangement is now becoming a major trend in global development. However, in advance pricing arrangement cases, it’s quite difficult to judge the authenticity of the company submitted documents and this would raise the necessity of exchange of information in identifying the real situation of cases.From the international development trend point of view, the important approaches to promote exchange of tax information in advance pricing arrangement would be:first of all, expanding the range in exchange of tax information by enlarging the tax categories and the scope of taxpayer in exchange of tax information and defining date range of exchange of tax information through adopting’foreseeably relevant’ standards. Secondly, protecting taxpayers’rights by securing the notification rights, consultation rights and intervention rights of taxpayers. Thirdly, reinforcing the security level of exchange of tax information by protecting business secret. Finally, removing restrictions on banking secrets in the exchange of tax information to improve transparency of the exchange of tax information.Taking national conditions into consideration, our country should pay attention to the following aspects:Firstly, promoting exchange of tax information in advance pricing arrangement rationally on the basis of insisting the fact that China is a developing country. Furthermore, increasing the protection of taxpayers’ rights and reinforcing the security level of exchange of tax information by optimizing relevant laws and regulations. Moreover, to promote the development of automatic exchange of tax information through the implementation of IGA between China and United States.Finally,strengthening the cooperation of exchange of tax information between areas on the foundation of positively and tax evasively signing agreement of exchange of tax information with major trading partners of China.