Looking At The Legal Regulation Of Intangible Assets From The Case Of Glaxo

With the globalization of economy, global Multi-National Corporations continue to growing, in order to more profits these Multi-National Corporations use different tax between different countries or regions and loopholes of tax administration laws, they transfer profits form high tax countries to low tax countries through a variety of methods.In such circumstances,a hot issue of international trade which called “Base Erosion and Profit Shifting”(referred to as BEPS) began to appear.To address this problem, twenty finance ministers and central bank governors meeting agreed to strengthen international cooperation to deal with the tax base erosion problems in 2012, and they decided to entrust the Organization for Economic Co-operation and Development(referred to OECD) do research on this project.In March 2013, OECD pointed out that transfer pricing especially the transfer pricing of intangible assets is the centre of prevent the erosion of the tax in the second global meeting of transfer pricing issues. Since the reform about opening up, China has already become the world's largest foreign direct investment recipient country, more and more foreign enterprises began to investment subsidiaries in China, the fact Chinese transfer pricing of intangible assets management started late, relevant laws and regulations is relatively lack. Therefore, the issue of transfer pricing regulation of intangible assets should arouse the attention of Chinese tax law scholars and tax authorities.The level of legislation in the United States is in a leading position in the world, and it is also more advanced in tax law. Relevant tax laws and regulations of the United States, especially in the legal regulation of transfer pricing of intangible assets, have an important impact on the world. In GSK(GlaxoSmithKline Holdings Inc. & subsidiaries group, hereinafter referred to as "GSK) with the United States federal tax department(internal RevenueService, hereinafter referred to as" IRS ") for up to 16 years of intangible assets transfer pricing dispute cases involving is the history of the United States of America's largest intangible assets transfer pricing case. The case caused countries the tax authorities and tax law circles widely discussed and attention. The final outcome of the case is the Glaxo group and the US tax authorities reached an out of court settlement, although the case is solved. However, about intangible assets transfer pricing dispute which involved has not been solved effectively, the opposite is but in the world caused widespread concern and discussion. This article by starting from the interpretation of the Glaxo case, combined with the OECD guidelines for the rules, the analysis of the case in the US tax authorities of some of the viewpoints and methods, the study on intangible assets' transfer pricing law problem, based on the Chinese tax authorities to better open exhibition within multinational companies involved in transfer pricing of intangible assets trading, maintenance of state tax revenue, put forward suggestions to improve the system to adjust to China intangible assets transfer pricing tax.In addition to the introduction and conclusion, this paper is divided into four parts.The first part introduce the basic facts and issues of the Glaxo case.The case involves the tax adjustment amount as high as $34 billion, the time span from 1989 to 2005 of a total of 16 years long, so this paper Xianli for clarifying the development process of the case. Understand the basic facts in the cases the main three controversial issues: whether Kazuran Soyusako company in the U.S. market for related activities to promote itself form some kind of invisible assets; Glaxo's American subsidiary whether ownership of these intangible assets, to obtain excess profit should be how to allocate.The second part is mainly analyse the Glaxo case involving the relevant legal and academic knowledge, a brief analysis of the intangible assets transfer pricing system related theory, including the definition of transfer pricing, definition of intangible assets, the independent transaction principle, global formula method and intangible assets transfer pricing adjustment method. To lay the theoretical foundation for the practical case analysis below.The third part is the Glaxo disputes over the case analysis combining with the relevant theoretical knowledge, including the analysis of the dispute of the case scope of intangible assets, in this case related to the intangible asset ownership determine the dispute, and both sides how to allocate profits brought by intangible assets.The fourth part is the enlightenment and significance of Glaxo case to China, first summarizes the legislative status quo of China's intangible assets transfer pricing system, analyzed and summarized the shortcomings. At last, combined with the Glaxo case to explore the Enlightenment of perfection in China intangible assets transfer pricing system. Include: clearly define the scope of intangible assets, determine the appropriate transfer pricing method of intangible assets, improve the system of booking pricing, the development of post regulation policy and so on.