Research On Transfer Pricing Anti-Avoidance With Multinational Companies In China

With the development of economic globalization, the enterprise transnational management has become an important mode of enterprise development.To seek maximum benefits and minimum global overall tax burden, multinational-operation taxpayers are more engaged in international tax avoidance by transfer pricing. That results in unfair actual tax burden among taxpayers, impacts the tax distribution relations among countries, damages the tax benefits of related countries. In order to prevent the multinationals’ tax avoidance, a lot of tax authorities have strengthened investigation and adjustment to multinational transfer pricing, to conduct a variety of crackdowns against international tax evasion. So, transfer pricing has also become one of the most contentious issues in the field of international taxation at present. Although nearly 30 years of anti-avoidance against multinational transfer pricing in China have made some achievements, there are many problems of our anti-avoidance work in urgent need of improvement in the severe international anti-avoidance situation. Therefore, how to strengthen China’s anti-avoidance work study has great significance. In this paper, based on the research of the transfer pricing anti-avoidance, and draw lessons from the successful experience of international anti-avoidance, puts forward suggestions on the work of transfer pricing anti-avoidance in China.This article carries out the analysis of Shandong Province’s anti-avoidance transfer pricing cases, examines the transfer pricing tax-avoidance of the multinational corporations, in order to presents anti-avoidance recommendations against multinational transfer pricing. This article first introduces the background and the importance of the research, and comprehensively states the domestic and foreign research literature. Secondly, it introduces the concept of transfer pricing, and the theory analysis of transfer pricing, to elaborate the multinational transfer pricing tax avoidance’s motives and basic forms, which leads to the anti-avoidance basic theories and thoughts. Thirdly, this article introduces the anti-avoidance status of the multinational corporations in China, and the APA applications in China. This part are as follows: firstly introduces multinational companies’ transfer pricing tax-avoidance in China, including an overview of multinational companies in China; secondly introduces the status of China’s transfer pricing anti-avoidance, including China’s transfer pricing anti-avoidance tax legal framework, anti-avoidance achievements and challenges; thirdly introduces the APA applications in China, mainly introduces the achievements and characteristics of APA in China. Fourthly, it elaborate the achievements and existing problems of Shandong Province’s anti-avoidance transfer pricing, from the introduction of the overall situation of Shandong Province’s anti-avoidance transfer pricing to multinational companies in China. And it carries out the analysis of Shandong Province’s anti-avoidance transfer pricing cases(M co.), details on the transfer pricing investigation and adjustment of case analysis, introduce the general procedure of anti-avoidance transfer pricing in our country and case inspirations to lay a foundation for reasonable anti-avoidance management suggestions. Fifthly, it summarizes developed countries’ successful transfer pricing anti-avoidance practices to carry out reference for China’s anti-avoidance. Sixthly, it summarizes the problem of the transfer pricing anti-avoidance in China, and presents anti-avoidance recommendations against multinational transfer pricing.