Multinational Enterprises Transfer Pricing Study Under The Double Standards

Since China’s reform and opening up, the rapid economic development, whether itis state-owned enterprises, foreign-funded enterprises and domestic private enterprisesto share the fruits of growth, China’s current economic steady development in thegeneral tone, is still in the world economy maintained a prominent position, to attractforeign investment momentum. According to statistics, more than80%of the world’stop500enterprises in the multinational companies in China to set up factories andconstruction division, the domestic enterprises in overseas investment. Multinationalenterprises based on a variety of purposes, with capital, regional affiliation, size effectand other advantages, is widely used in transfer pricing means to benefit in the globalscope to maximize.This paper mainly introduces the basic content of the tax management of transferpricing and transfer pricing in China in the customs valuation management, and thenanalyzes the difference between the two kinds of valuation principles and common.Transfer pricing tax avoidance by using first differences between countries andproduce, but with the cooperation of the tax system to improve and strengthen theinternational tax avoidance purposes, gradually weakened. At the same time, alongwith the development of globalization, the enterprise management and enterprisemanagement, enterprise transfer pricing has become open up new markets, reduce theexchange rate risk, political risk and other tools for the purpose of transfer. The theoryof late development of transfer pricing management of tax authorities, but the taxdepartment through the successful international experience, according to the OECD"multinational enterprises and tax authorities" transfer pricing guidelines formulated aseries of laws and regulations, establish the basic laws of our transfer pricing taxmanagement and effective examination method. The customs authorities in China will follow the "WTO agreement" customs valuation principle on the part of the importand export trade to re valuation. Since the implementation of the law department,follow different, both for the identified transfer pricing behavior of enterprises there isa contradiction between tax authorities and customs are lack of communication,coordination and solving the contradiction is still in the stage of exploration.Enterprises in order to avoid the re valuation and double taxation, the similarities anddifferences must be in-depth study of this two kinds of rules, through comparativeanalysis of the rules, to perfect the transfer pricing scheme, to find a path to reduce thetax risks for the enterprise. Another characteristic of this paper is that, using a varietyof business case analysis in the dual rule in the plight of the specific situation. Finally,combining the theoretical analysis on the possibility and maneuverability, the paperputs forward some policy suggestions for the Multi-National Corporation to reducethe tax risk of transfer pricing.