The Thinking Of Chinese Transfer Pricing Taxation System

Currently, with the purpose of avoiding tax, the transfer pricing behavior of multinational company is not a new thing. It not only harms the host country’s tax benefit, but also is not conducive to fair competition between enterprises. National tax authorities had already realized the seriousness of the loss of tax revenue brought by multinational companies through transfer pricing, and established a transfer pricing tax system for anti-avoidance.However, with different background, the transfer pricing taxation system in different country is also different. The United States as the most developed country, the transfer pricing legislation development is the earliest, transfer pricing tax system is the most perfect,learned by many countries. OECD has give a useful reference standard to many countries to establish a transfer pricing tax system. Our taxation authorities has established the "Implementation Measures for Special Tax Adjustments (Trial)(Guo Shui Fa [2009] No.2) as the core transfer pricing tax system.This paper has four chapters, the second part is a theoretical introduction of our country’s transfer pricing tax system compare with foreign tax; The third part described the transfer pricing tax system is based on the analyzes of the ZFC company case, and made the case. The specific contents are as follows:Chapter1is an introduction, mainly made of the significance of the topic of the article, research methodology, literature review introduced.Chapter2is an overview of Transfer Pricing Taxation on related enterprises, related transactions, transfer pricing adjustment principle, the method of transfer pricing adjustment. Also, I have gave comments on Transfer Pricing Taxation.Chapter3is the use of the Transfer Pricing Taxation-ZFC case. This chapter is a very typical case of transfer pricing analysis, from the level of the actual operation, the use of transfer pricing tax system for analysis, and case and make the corresponding evaluation. Chapter4is the thinking of our pricing transfer tax system, which is based on the legislation of transfer pricing tax system and ZFC cases. Firstly It should improve China’s transfer pricing system feasibility on the legislative level; Secondly it pointed out that ie should improve the operational level.Transfer pricing in China, adding case elements, thinking of the Transfer Pricing Taxation existence innovations in the following areas:1.A combination of theory and case study perspective exists innovationThe innovation of this paper is not only the introduction of the latest transfer pricing regulations, but based on the knowledge of the use of transfer pricing, with independent analysis on ZFC Company Case analysis. Through combining theory with practice, readers not only know more knowledge on transfer pricing, but also draw relevant enlightenment through a case to put forward in perfecting China’s transfer pricing tax system on the legislative level and operational level recommendations.2. make comments on transfer pricing tax systemThrough the introduction of transfer pricing tax system, I evaluated it in the perspective of legislators principle.set by the various regulations, provisions, and information collected through the database of Chinese and foreign language journals. Data resource system database retrieval, summarize the national transfer pricing tax system, probably ground with China’s transfer pricing tax system, evaluation of transfer pricing tax system inadequacies exist.3. proposed the establishment of a viable and effective transfer pricing tax system(l.)Multinational proceeds must compete with each other on the equitable distribution between countries therefore recommended that the country should promote the signing of multilateral agreements; basic principles of the system must be accepted by the international community, and therefore recommended that China should introduce the concept of fair trade value range; must have reasonable certainty, and therefore we should be careful to choose the adjustment method to adjust the standar7d;(4) Low efficient consumption, this suggests to strengthen tax information exchange;(5)for analysis and to calculate the arm’s length price standard must be established on the basis of fluctuations up and down the arm’s length price;(6) must be binding arbitration proceedings, this country should clear the burden of proof.