Study On Transfer Pricing And Base Erosion

This paper is to analyze the status of base erosion and profit shifting for worldwide and China with the case study where multinational company avoid tax burden through transfer pricing arrangement.It also provided the deep analysis on how unreasonable transfer pricing impact to the world economy as well as the staple principle and methodology using to plan tax avoidance.It disclosed that more and more arrangement in relation to base erosion and profit shifting is done by China subsidiaries of multinational company.This paper is intended to interpret China tax authority planning on tax evasion through transfer pricing under current tax regulation and improvement is made by China tax authority based on BEPS guidance released by OECD.Based on case study on strategy and method of transfer pricing ? global supply chain for group company A to analyze general ways to make tax avoidance using transfer pricing and the mechanism behind.The intention is to provide reference to improve China tax regulation in order to better defense China tax benefit.The unreasonable arrangement of transfer pricing for Multinational Company erode China financial and tax system and obstruct international economic order.China government is facing the challenge in this regards.This paper provided the technology study on tax regulation especially made comparisons among each transfer pricing method.It is to justify that the implication arising from unreasonable transfer pricing arrangement with supported by the real case study of group company A.