Research On The Optimization Of China Advance Pricing Arrangement System

In the era of economic globalization,more and more multinational enterprises use tax transfer pricing methods to avoid tax.Correspondingly,more and more countries have established the transfer pricing tax system to carry out anti-tax avoidance work.However,because of the traditional transfer pricing adjustment mechanism which adjust transfer pricing after it happened,the transfer pricing dispute between the tax departments and multinational enterprises has been exacerbated.The Advance Pricing Arrangement(APA)has entered the vision of tax departments and enterprises with its unique advantages.In recent years,China's advance pricing system has been continuously improved,but in practice,it still reflects some problems that need to be improved.The increasing demand for advance pricing arrangement of multinational enterprises puts forward higher requirements for China's advance pricing work.It is imperative to improve the advance pricing system and optimize the advance pricing service in China.Guided by the optimization of China's advance pricing system,starting from the introduction of the relevant theories of APA,in order to fully understand the profound connotation of APA,this paper first introduces the relevant theories of tax jurisdiction and international double taxation as well as transfer pricing and traditional transfer pricing adjustment,studies the concept and type characteristics of APA,and makes a comparative analysis of various types of APA.At the same time,the paper introduces the causes and influence of APA in the world;Secondly,this paper studies the necessity of carrying out APA in China,and explores the implementation of APA in China from two aspects of legal basis and practice;then through the case analysis and comparison before and after Announcement 64,it reflects the improvement process of APA system in China,combines the legal basis and practice of APA in China,and analyses the main problems and their causes of the advance pricing system in China;On this basis,this paper studies the guiding suggestions on APA put forward by OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations 2017;At the same time,based on the maturity and advancement of the United States APA system,it makes the comparison of the APA system between China and the US and sum up the reference significance of the international advanced experience of APA.In the end,in the light of the existing problems of China APA system,three pertinent suggestions are put forward from the aspects of system,practice and soft environment.In terms of legal provisions,our country can expand the scope of application of APA and specify the procedures by categories,clarify the legal responsibility of trade secret protection,and increase the specific ways of dispute resolution;in terms of practice,our country can attach more importance to the role of Advance Pricing Arrangement Annual Report,guide and enrich the selection of transfer pricing methods,and explore the mechanism of cooperation with other departments;in terms of the supporting soft environment,our country can establish and optimize efficient as well as sharing information database,scientifically allocate and construct professional talent team,as well as strengthen international coordination and cooperation.The purpose of this paper is to promote the optimization of the APA system of China and improve the service quality of APA through the above three aspects of policy recommendations.