The Research Of Our Country’s Tax Management Of Transfer Pricing

Since1990s, our country`s economic has kept on a high rate, which attracts manytransnational enterprises settled in China. This situation which promoting the adjustment ofeconomic construction and industrial reformation not made up the lack of our construction fundon the one hand, and created many jobs on the other hand. However, the transfer pricing methodapplied by multinational enterprises through their affiliated agencies achieve tax evasion hasbecoming worse, which makes a huge loss in our tax revenues and break the fair environment ofinternational taxation. Although our country has a great improvement in the management oftransfer pricing in these years, there are still a lot of problems according to other countries, likeAmerica, Japan, etc. So it is important to improve our tax management of transfer pricing, whichcould strength the construction of anti-tax avoidance, protect our tax revenues and keep the fairtax environment.The paper will firstly present the background; following will be the sense of the research, thecontext and the research method, the research situation of the oversea countries and our country.After that, the paper will introduce some basic concept concerning the paper, like the concept oftransfer pricing, the tax management of transfer pricing and the advance prices agreement. Thetheory basement of the paper is the game theory. A game matrix will be established between taxpayer and tax government and we will come to conclusion that there are a great business betweenthe choice of transfer pricing or not and the intention of the management. The government shouldstrength the punishment to reduce the possibility of transfer pricing.Next, it will introduce the basic context of the tax management of transfer pricing in ourcountry. Firstly, it introduces the three stage progresses of the management of the transfer pricingin our country. Secondly, it introduces the main context in three fields, concluding themanagement decision-making, the administration and the tax source. Thirdly, it introduces thecurrent situation of the management. The investigation and adjustment of transfer pricing isstrength and the progress of APA is moving on in a great rate. The staff in tax government isbecoming expansion. The use of tax message exchange and discussion between different countriesis becoming popular. Of course, there are still some problems. There are some insufficient in the legislation according the transfer pricing. And the passage to comparability message is still limited.There are some lacking in management of contemporaneous documentation and the organization.It comes to some suggestions founding on the introduction of developed countries`practices.These suggestions concluding dividing management organization according to the progress ofeconomics, importing experts in other regions, standardizing of the contemporaneousdocumentation, the construction of information, and the critical punishment.In the end, the paper gives some advices on how to improve our tax management of transferpricing. The government should perfect the legislation according to the transfer pricing in order toconvenient for the tax institution. The APA should be kept an eye on it. The management systemof anti-tax avoidance should be extended during the whole country. In the meantime, the taxgovernment should connect with the other departments, like the customs and the bank, to enhancethe capability of management. The management of contemporaneous documentation is a weaklink. The tax institution in every region should carry out the same request to reduce theinconvenient of tax payers who try to follow the law. It is important to advertise the tax payers theimportance of contemporaneous documentation and give some advises on how to draw it up. Thegovernment could establish a special organization to govern the transfer pricing. It is a good try todivide the management organization according to the progress of economics, which couldconcentrate on the developed regions in order to improve the efficiency. The staff in taxmanagement of transfer pricing is very important. The government could improve their ability inthree ways, the cultivation of the fresh, the recommendation of experts from other regions and thetrain of the staff on the job.