Transfer Pricing Dispute Resolution Methods Of Research

Because international transfer pricing behaviors increase continuously, transfer pricing dispute which is invoked by adjustment are more and more. If this kind of dispute can't be solved carefully, may not only cause double taxation between countries, but also obstruct international economy cooperation and exchanges.Currently, the main method of settling the mentioned problem is mutual agreement procedure. 1997 OECD ((Model Convention for the Avoidance of Double Taxation with respect to Taxes on Income and on Capital ? (OECD Model for short) and 1980 UN ((Model Double Taxation Convention between Developing and Developed Countries)) (UN Model for short) all cite this procedure . Until recently majority international tax conventions according to OECD Model or UN Model, stipulate mutual agreement procedure to settle transfer pricing dispute.But the theory is proved that mutual agreement procedure can't settle all disputes satisfactorily. So after 1980's, some nations introduce arbitration into international tax convention after realizing inherent defect of mutual agreement procedure. Now one of way of arbitration is stipulated in bilateral agreement, over fifty agreements having ruled arbitration, the other is established mechanism of arbitration by multilateral agreement, existing in EU only. The arbitration can make up for effectively the shortage of mutual agreement procedure, but its influence to state taxation sovereignty obstructs its application.Above mentioned two kinds of settlements after transfer pricing dispute can't avoid the occurrence of dispute, so they are negative methods. Recently developing of advance pricing arrangement turn adjustment afterwards into examination in advance, known as a tax administrative measure that multinational enterprises, in advance...