The Research On The Tranfer Pricing Tax Risk Management

In these growing market competition days, the transactions among related partieshave become common phenomenon due to the more detail divisions of our economicsociety. In order to keep own tax income, countries are managing transfer pricing morestrictly based on updated tax regulations. Tax investigation is becoming more professionalin China. Thus, corporate should pay more attention to his tax plan and tax risk about thetransfer price for transactions among related party. Transfer pricing documentation is agood tool of tax plan and transfer pricing risk management, which is helpful for enterpriseto take timely actions to achieve tax risk management. Thus this article is deeplyresearching transfer pricing documentation based on its regular management.This article explored the definition and components of transfer pricing, risk and taxrisk that enterprises are facing and relevant management. Analyze the transfer pricing taxrisk of enterprise and it includes: penalty of law complaints, tax amount adjustment,penalty interests, double tax and lasting management by tax authority. And raise theresolution approaches of transfer pricing risk management. On Simpson corporate case,explore the importance and necessaries of transfer pricing documentation in the process oftax risk management of related party transactions. Deeply analyze the preparation processof transfer pricing documentation and it includes corporate ownership and control structure,operation condition, transaction among related party, function and risk of related parties,calculation method of transfer pricing. Finally, we got that: transfer pricing documentationis key great tool of transfer pricing tax risk management. Its preparation process is helpfulto under policies of transfer pricing and take action to resolution of potential transferpricing tax risk.