Company H’s Transfer Pricing Case Study Under ERP

With the increasingly development of economic globalization, multinational corporations become to the main role in the international business activities. Multinational corporations use their abundant capital, advanced scientific research technology, efficient management network and flexible marketing mode to carry out trade activities on a global scale. Transfer pricing as an important means of enterprise multinational management, it focuses on the primary goal of the global corporate strategy, using artificially regulating internal trading prices to help multinational companies to realize scale expansion, optimize earnings and allocate resources, improve the efficiency of enterprise’s internal division of labor, risk aversion, transfer profits. Multinational corporations, especially multinational companies of China, how to use transfer pricing tools to implement its global strategic target by complying laws and regulations of the host country, this is the main focus of this study.Take multinational Company H as an example in this article, from the perspective of enterprise managers, go through in-depth understanding of Company H’s historical background and the internal and external environment of enterprise, analyzes its motivation and influence factors on the implementation of transfer pricing, proved the specific ways and methods of transfer pricing application as well as the potential risk on the transfer pricing and how to manage the risk. In the end, it analyzes the present situation and problems by using transfer pricing in multinational corporations under the enlightenment of transfer pricing strategy in Company H in the environment of ERP, for different enterprise organization environment and the external market environment or other comprehensive factors, put forward basic interests in respect of the host country, under the premise of abiding by the laws, regulations and policies of host country, draw lessons from the mature experience of other multinational companies, to develop reasonable transfer pricing scheme, continuously improve the transfer pricing decision-making system and implement the standard advice, eventually realize the maximization of the overall efficiency of enterprises and long-term stable development.