Research On Tax Risk Identification And Countermeasures Of Transfer Pricing Of Shandong M Company

In order to reduce their tax burden,multinational corporations often transfer pricing through related party transactions to change profit distribution.This kind of tax avoidance will lead to their own tax risk of transfer pricing.With the continuous improvement of international tax rules and the acceleration of world economic globalization,it provides more opportunities and more severe challenges for the transfer pricing behavior of multinational corporations.In particular,the tax base erosion and profit transfer(BEPS)action plan proposed by the Economic Cooperation Organization(OECD)aims at combat the tax avoidance behavior of multinational corporations.Once proposed,it has received positive responses from many countries around the world,and may have a significant impact on the transfer pricing behavior of multinational corporations in the future.On July 1,2021,130 countries(regions)in the inclusive framework of the Economic Cooperation Organization(OECD)issued a joint statement announcing that they had reached an agreement on the new international tax rules,that is,the latest achievement of the "two pillars" was established.This shows that the tax authorities of various countries have taken a positive attitude and gradually strengthened the management and control of transfer pricing of multinational corporations,and China is no exception.However,from the current situation,multinational corporations still have insufficient understanding and management experience of transfer pricing tax risk.In order to effectively respond to the current national situation and global economic changes,multinational corporations should dare to analyze the internal and external defects of transfer pricing tax risk management,and take positive measures to improve and intervene.Firstly,on the basis of combing the existing research literature at home and abroad,this paper expounds the relevant theories of transfer pricing and tax risk in detail,and takes Shandong M company as an example to illustrate the tax risk faced by enterprise transfer pricing.Shandong M company is a subsidiary of a large-scale electronic component manufacturer in South Korea established in Shandong Province,China.The enterprise has a single production function,but has suffered serious losses for many years.Because it is a processing enterprise with supplied materials,its raw materials are provided by related parties,and its commodity sales are also completed jointly with related parties,which is a typical transfer pricing behavior.Firstly,this paper introduces the basic situation and production and operation of Shandong M company over the years.Secondly,through the analysis of related party transactions,functions and risks undertaken in the transfer pricing process of Shandong M company,this paper verifies that Shandong M company has certain tax risks in the transfer pricing problem.Then,this paper analyzes the specific reasons for the tax risk in the transfer pricing of Shandong M company from both internal and external aspects.Finally,according to the current situation and causes of Shandong M company,this paper puts forward targeted suggestions.It is worth mentioning that due to the information asymmetry between tax enterprises,this paper draws inferences from one instance and opens up a new perspective,that is,through the introduction of the anti tax avoidance workflow of the tax department,to standardize and analyze the functions and risks of enterprises in related party transactions,and according to the reasonable pricing methods of related party transactions commonly used by the tax authorities,According to the transaction characteristics of Shandong M company,the transaction net profit method is adopted to adjust its profit.By letting enterprises understand the anti tax avoidance work of the tax department to effectively avoid the tax risk of transfer pricing,the legitimacy and rationality of enterprise transfer pricing behavior can be improved.