Research On Risk Control Of Transfer Pricing Of D Company

With changes of global economic environment, particularly in the background of American subprime mortgage crisis, European sovereign debt crisis and frequent outburst of global financial storm, the economic situations from various countries in the world are constantly changing, the economic entities in various places are seeking for new outlets, not only large-scale international transnational enterprises choose China as part of their strategic deployment, many small and medium-sized transnational companies also successively orient their vision of development at China. How to conform to new requirements on globalized development and to seek opportunities in crisis has become an important research field for operation of the transnational companies.The BEPS plan launched by G20 in 2013 could be called as the biggest reform in taxation system of the world over the recent hundred years, and the tax evasion issues thereby caused by pricing transfer from foreign-invested enterprises in China also pose extensive attention. The action plan for BEPS and the periodical achievements announcement in 2014 are released by State Administration of Taxation in September 2014, the Administration announces to actively take part in BEPS action, to perfect taxation legislation and to strengthen multilateral cooperation, to jointly fight against transnational tax evasion, and to match tax revenue with substantial economic activities and value creation, and to maintain the legal rights and interests from China in international trade.AM Group is the world’s largest manufacturer of refractories, which is headquartered in Austria, the Group has four subsidiaries in China, D Company is one of them, D company from its inception, and gradually expand the production scale, but involving transfer pricing strategy, resulting in profits in general. The issue of pricing transfer has caused deep influences on the political and economic field in China since reform and opening-up, with more and more profound research on the issue of pricing transfer, the supervision on pricing transfer from transnational companies is becoming more and more strict, if D company still using the current transfer pricing, it will face the check of the relevant functional departments, and thus faces many risks reputation, fines.This paper has analyzed the definition, influential factors and motives on pricing transfer in details starting from the theoretical basis of pricing transfer, analyzes the relevant circumstances of D Company, studies its existing pricing transfer pattern and the possible risks in the new monitoring environment, and therefore, puts forward the measures should be taken by transnational enterprises. The pricing transfer inherently has two aspects, on one aspect, it’s the means used for realization of globalized strategic cooperation, on the other aspect, an inappropriate pricing issue will also infringe the fiscal and taxational rights and interests from the host countries, therefore, various countries of the world are actively perfecting the relevant policies and regulations, strengthening international cooperation, eliminating negative influences from pricing transfer, and making efforts for building a sound international economic transaction environment.