The Conflict And Coordination Of Customs Valuation System And Transfer Pricing Adjustment System

With the background of accelerating globalization of knowledgeeconomy,transactions of global technology,patent,copyrights,trademark rights and the otherintangible assets are becoming more frequent in the world.As a result,thecross-border royalties paid for the right of intangible assets by enterprises is larger.The multinational companies whoare the leading rolearound the world became the largest collection of royalties because of their high-end research and developmentcapabilities and a large number of outstanding talents.The multinational companies set internal price which above or below the fair pricein the relevant transactions for various purposes.This will not only affect the allocation of tax base in the national tax jurisdiction,or even deprive a government of the tax share in cross-border transactions under fair trading environment.The tax jurisdiction over royalties are tax authorities and customs which limited to the royalties related to import and export goods in our country.Because of thefrequent transfer pricing of multinational corporations,a great reduction of the baseof royalties happened in the amount of the tax revenue dominated by customs and tax authorities.In addition,the lack of effective exchanges and cooperation between customs and tax authorities makes the regulation and punishment of transfer pricing behavior by multinational corporations in China still weak.Eventually,it damages the country's overall tax benefits.The customs and tax authorities will be subject to ultra vires tax or the double taxin the light of the needs of their own respective intereststo the same royalties.The taxable enterprises will have double taxation and double valuation at the same time,which not only exacerbated the cost and burden of taxable enterprises seriously,but also caused a great waste of government resources.To prevent the greattax damages caused by transfer pricing within the related transactions in multinationalgroup,to coordinatethe confliction on royalties between customs and tax authorities,it is urgent to strengthen the joint governmental supervision on the transfer pricing of multinational groups by customs and tax authorities and establish and improve the information exchange mechanism between government and government,government and nongovernment.The first part of the thesisintroduces and analyses the tax collection path and valuation system of royalty,drawing the conclusion that there are two tax collection path by tax authority and custom respectively and there are two valuation systemby tax authority and custom respectively.The second part of the thesis analyses the conflicts and damages in the aspects of the tax jurisdiction,fair price determination and the requirements of the declaration documents on the tax administration of royalties between tax authority and custom through analyzing the relationship and difference between customs valuation system and the transfer pricing adjustment system on royalty.The third part of the thesis proposes the suggestions to establish the information communication mechanism between governments,government and nongovernment through analyzing the basis and barriers of coordination between the customs valuation system and the transfer pricing adjustment system and drawing lessons from the guidance of international organizations and the coordination experience of some countries.It is of great practical significance to strengthen the tax collection and management of royalty,to reduce the pressure of the taxable enterprises,to reduce the waste of government resources and to safeguard the sovereignty and interests of the state tax.