The Research And Application Of MNES Transfer Pricing Methods

With the development of MNEs global business strategy, transfer pricing issues become more and more outstanding. MNE using transfer pricing for the purpose of tax evasion has drawn attention in worldwide. With the new "Enterprise Income Tax Law" and "Implementation Measures for Special Tax Adjustments (Trial)" was promulgated, China made a comprehensive specification on counter-tax-avoidance operations, especially on tax adjustments for transfer pricing. Considering Chinese supervision on transfer pricing, MNE had to think about the transfer pricing risk into management to avoid transfer pricing being investigated and adjusted.This paper studies the Causes of transfer pricing, combs the global development of transfer pricing management, elaborate the core principles of transfer pricing and the main transfer pricing methods. Finally, we select NL laser semiconductor as a case study. Describe its operation, development strategies and current situation of transfer pricing management. Under the use of qualitative research and quantitative research, combining comparative studies and comprehensive analysis and the combination of the theory and application, we evaluated the transfer pricing risk of NL laser semiconductor in its composite business and choose the appropriate transfer pricing methods for each function. We found the arm’s length range after benchmark which is the basics of transfer pricing plan. We have worked out a complete and feasible transfer pricing plan in the end.