Research On The Management Of Transfer Pricing Of Intangible Assets In The Background Of BEPS

As the action plan of BEPS advances,the transfer pricing of intangible asset is becoming one of the most discussed topics in international taxation.On the one hand,even though multinational corporations primarily targeted transfer mispricing of tangible assets for tax avoidance in the early days,the exclusivity,non-physical nature and indeterminacy of intangible assets makes the tax avoidance approaches more concealed for tax authorities to manage,therefore attracting more multinational corporations to shift their emphasis.On the other hand,China lacks clear legislation regarding the transfer pricing of intangible assets,which leads to uncertainty for both tax payers and law enforcement.This paper uses case studies to analyze and conclude the primary methods Chinese-based multinational corporations use for tax avoidance through transfer mispricing of intangible assets.We also discuss how the issues could be addressed so tax authorities could better prevent transfer mispricing of intangible assets.Firstly,we start with BEPS's action plan,compare the tax-related legislation both domestic and abroad.We indicate the differences in definition of various terms,give contrastive analysis to provide theoretical foundation for our case studies.Moreover,we summarize the situation in terms of how intangible assets are currently being managed by tax authorities and the approaches for tax avoidance.As we describe the current situation,we also introduce the documents related to the transfer pricing of intangible assets in China and point out the legislative adjustments Chinese tax authorities made regarding the action plan of BEPS.In the case studies,we analyze the methods multinational corporations use to achieve tax avoidance through transfer mispricing and conclude four major approaches.In addition,by considering both the action plan of BEPS and domestic legislation,we analyze the legislative and practical issues that come with the four major tax avoidance approaches and provide sound foundation for tax authorities' decision making.Finally,we provide specific suggestions for tax authorities to better protect the tax benefits of China.