The Principle And Practices Of Transfer Pricing For Multinational Corporation

From the Reform and Opening of China, the governments provide the Preferable Tax policy and competitive investment environment to Multinational Corporation to invest in China for absorb more foreign investment to develop the Chinese economy. Most of these Multinational Corporation use transfer pricing as a tools to meet their global target, and also treat it as a profit-shifting mechanism to minimize its global tax liability and maximize its global after-tax profit ineluctably. Incontestable these Multinational Corporation made the major contribution for developing Chinese economy exactly. But there are still have negative influence for our revenue and investment environment. For China, we did not have systemic study for Transfer Pricing until the year of 1991. In general, we just follow the principle of overseas to monitor transfer pricing of Multinational Corporation. So if we can set up Chinese-character transfer pricing module to monitor and manage will be benefit for our economy growth health.The purpose of this dissertation expounds the definition of transfer pricing, the basic principle of transfer pricing setting up and the methodology of adjustment. And raise some suggestion base on demonstration analysis.