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Multinational Enterprises Transfer Pricing Legal Research

Posted on:2006-05-12Degree:MasterType:Thesis
Country:ChinaCandidate:G Y LinFull Text:PDF
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As the multinationals are becoming strong in the process of globalization, the phenomenon is domestically increasing that the multinationals use transfer pricing for tax evasion. Under its operation strategy, multinationals transfer profit from high-taxation country to low-taxation country by transfer pricing, in order to realize global profit maximum. But these behaviors make great losses of the host country's tax basement, and do great harm to the economic interest of the host country.This article researches in detail on transfer pricing law and it's recent new changes. Through these researches, combined with the reality in our country, the article analyzes the characters of the multinationals transfer pricing in our country, bring forth some amendment advices to our country's recent transfer pricing law.In addition to the introduction, we will examine the article with six chapters as follows:Part Ⅰ Multinationals' transfer pricing. This chapter mainly researches on two questions, "what is affiliated enterprise "and "what is transfer pricing". Affiliated enterprise is the object to which the transfer pricing law is applied. Section 1 first defines the notion of the affiliated enterprise in law, then compares the criteria to judge affiliated enterprise of different countries, last analyzes the criteria of china. Section 2 introduces the definition of transfer pricing and the ways by which the multinationals transfer price for tax evasion.Part Ⅱ Traditional principle and methods to control multinationals' transfer pricing. This chapter mainly introduces the Arm's Length Principle and three methods to adjust transfer pricing under it, that is comparable uncontrolled price method, re-sale price method and cost-plus method, and comprehensively analyzes the accuracy of these three methods. At last, it points out the dilemma of the Arm's Length Principle carried out in practice and its theoretical defect.Part Ⅲ New development of transfer pricing methods. This chapter researches on the two trends that appear in the recent international transfer pricing law. One is from "price" to "profit", these new methods abandon the criterion of price while take the profit as compared object instead. Section 1 introduces indetail these new methods: comparable profit method> profit-split method and transactional net margin methods, and analyzes the advantages and the scope to apply one by one. The other trend is from "later check" to "precaution control", that is Advance Price Agreement. Section 2 first makes a simple review on the history background in which APA is brought forth, then summarizes the process and contents of APA, last comments on the merits and demerits of APAPart IV Electronic commerce and transfer pricing law. This chapter mainly analyzes the challenges the electronic commerce to the transfer pricing law, and separately explains the attitude to electronic commerce of OECD law and American law. In the last section, it probes into questions that in the electronic commerce transaction how and when adopt one of these methods.Part V Transfer pricing law of china and its perfection. This chapter mainly makes detailed research on transfer pricing law of china, and comes up with some suggestions of perfection. Section 1 reviews the development of transfer pricing law of china, and summarizes the characters of transfer pricing law of china in practice. Section 2 makes researches on the perfection of transfer pricing law of china from two sides. One sides is the scope and the principle to apply transfer pricing law, the other side is the methods to adjust transfer pricing.
Keywords/Search Tags:transfer pricing, multinationals, affiliated enterprise
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