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作业代写:Cross-border transfer pricing risk management

2018-09-27 来源: 51due教员组 类别: Paper范文

下面为大家整理一篇优秀的paper代写范文- Cross-border transfer pricing risk management,供大家参考学习,这篇论文讨论了跨国转移定价风险管理。跨国转移定价税务风险具有复杂性和长期性等特点,由于世界各国税率变化和转移定价立法加强等原因,给转移定价带来了一定的税务风险。必须通过风险评估和整合信息,同期文件准备和签订预约定价协议等措施加强跨国转移定价风险管理。

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Transnational transfer pricing tax risk has the characteristics of complexity, dependence and long-term. It is also caused by the changes of tax rates in various countries, the strengthening of transfer pricing legislation, and the intensified tax review of tax authorities on transfer pricing. Risk management must be strengthened through risk assessment, the establishment of a special committee for tax risk management of transfer pricing, integration of information, documentation preparation during the same period and the signing of advance pricing agreements.

Transnational transfer pricing is the price used in transactions between transnational corporations and their related parties. Horst and Capithome point out that if a multinational company operates in a country with more than one different tax rate, the setting of transfer prices is often different than if there is no tax difference. Even small differences in tax rates can generate large differences in cash flow through the transfer price. Because transfer pricing is not directly affected by the market supply and demand relationship, nor is it completely determined by the value of the product itself, multinational companies often use transfer pricing as a strategic tool to transfer profits between related enterprises, reduce the actual tax burden, and maximize the global after-tax profit. Douglas a. hackelford points out that profit transfers can be made through accounting adjustments rather than changing the factors of production of a product, so the transaction costs of transferring profits using transfer pricing are relatively small. RogerY. W.t. ang conducted a transfer pricing questionnaire survey among 143 companies in fortune 500, asking them to explain the methods of transfer pricing and state the factors influencing the determination of transfer pricing methods. The results showed that global profit maximization, tax considerations and other factors were regarded as the most important factors. Surveys by PWC, deloitte and others on the dominant factors of multinationals' multinational operations have come to similar conclusions. In the context of economic globalization, using transfer pricing to avoid taxes is almost a common practice of multinational companies. However, it should also be noted that in order to protect national tax rights and interests, many countries have already taken various measures to strengthen the review and management of tax avoidance of transfer pricing, and China has added the content of special tax adjustment in the enterprise income tax law. The anti-tax action makes it more and more challenging for multinational companies to use transfer pricing to avoid overall tax burden. With the strengthening of transfer pricing legislation and supervision in countries around the world, transfer pricing risk management needs to be given enough attention. Based on the annual survey data of transfer pricing conducted by KPMG, ernst & young and pricewaterhousecoopers, this paper makes a systematic analysis of the characteristics, types and causes of transnational transfer pricing tax risks, and proposes measures for tax risk management of transfer pricing.

Tax risk of transfer pricing is the adverse impact on tax payment caused by transfer pricing. It mainly refers to the actual or possible loss of economic or other interests of enterprises due to the failure to properly fulfill relevant provisions of tax laws and regulations in transfer pricing, which affects the accuracy and timeliness of tax payment. The specific performance is as follows: the uncertain factors in enterprises' tax-related behaviors eventually lead to the enterprise paying more taxes than expected, or the tax authorities' investigation, distrust and punishment on the enterprise due to the low payment of taxes and the failure to pay taxes in a timely manner. The main characteristics of transnational transfer pricing risk are as follows:

Tax avoidance is only one of the diversified goals of transfer pricing. These goals may conflict with each other and use transfer pricing to avoid tax expenditure, but it may also lead to adverse effects on other related aspects. The ever-changing economic environment of countries around the world, especially the introduction and revision of tax laws and regulations, increases the uncertainty of the future of transfer pricing. Transfer pricing may at any time produce the opposite or undesirable result of the design due to the change of environment. When determining transnational transfer pricing, it is necessary to consider not only the factors to be considered in formulating general price, but also the legal systems, market conditions, level of competition and inter-governmental relations of two or more countries. Transnational transfer pricing is complex, so the risk is also complex.

The risk of transfer pricing comes mainly from the examination of national tax authorities. In order to prevent multinational companies from using transfer pricing to avoid taxes, many countries have invested manpower, financial resources and material resources in anti-tax avoidance actions. The extent of transfer pricing risk is affected by the tax authority's examination, and the tax risk is relatively higher if the examination is more intensive, and lower if it is less intensive. In addition, the risk is also related to the perfection of a country's tax laws and regulations as well as the business level of tax collectors and examiners, which is dependent on the tax environment of a country.

From the review and evaluation period of transfer pricing determined by relevant national laws and regulations, it can be seen that the us regulation is generally three years; Japan's rules are 3-6 years; Six years after the end of the company's fiscal year in the UK, the period of recourse for fraud or false reporting will be extended to 21 years; China stipulates that the examination period shall be three years from the date of approval by the state administration of taxation, which may be extended to 10 years if necessary. It can be seen that the risk period of transnational transfer pricing is long and has long-term characteristics.

The existing literature divides the risk of transnational transfer pricing into the following aspects: increase the taxable liability; Potential double taxation; Receiving penalties and not enjoying the benefits of deferring taxes; Uncertainty about the global tax burden; Long-term relationship with tax authorities. In order to facilitate the effective management of tax risks of transfer pricing, this paper divides them into the following categories:

In many countries to transfer pricing required to provide documents preparation, multinationals need to according to the requirements of its transfer pricing measures to do the same record, according to requirement of the relevant laws and regulations to disclose or report, to show the company's system, select the system reason and the rationality of the system to determine the price of the transfer of company. The scope and quality of the documents provided will affect the extent to which the tax authorities investigate transfer pricing. If the company fails to provide relevant documents such as transfer pricing system in time, the adjustment of transfer pricing may be triggered and punished accordingly.

With the continuous improvement of transfer pricing legislation in various countries and the implementation of transfer pricing investigation and audit by tax authorities' anti-tax avoidance teams, the transfer pricing among related enterprises is under the investigation and audit of tax authorities and may be subject to transfer pricing investigation at any time. According to ey's 2005-2006 global transfer pricing survey, the 2005 global survey found an increase in the level of transfer pricing audit activity. Since 2001, 65 per cent of the parent company and 59 per cent of its subsidiaries have undergone transfer pricing surveys. The survey found that 44% of the parent company and 34% of its subsidiaries needed adjustment.

Tax authorities after the transfer pricing investigation, if it is found that is not in conformity with the principle of transfer pricing, is entitled to require the multinational enterprise adjustment, adjustment will lead to the following aspects: the influence of the total profits of every transaction is certain, when the original attribution overseas affiliated enterprise profit has been adjusted to another country affiliated enterprise, the part of the profits of income tax paid outside China, and another part of the profits again levy income tax, the resulting double taxation; Change the original financial plan of the group and related enterprises. The anti-tax avoidance adjustment results in the redistribution of the profits of multinational enterprise groups among the related enterprises in various countries, which will inevitably change the original financial plan. The investigation process will involve a number of related enterprises in multiple countries and regions, as well as a number of related departments and personnel, which will have a significant impact in multinational groups. In addition, the investigation takes a long time, complicated process, repeated negotiation and supplementary materials, and the enterprises under investigation need to invest a lot of time and energy.

In recent years, many countries in the world have increased the legal measures to punish excessive or malicious transfer pricing and to avoid, mitigate or aggravate the punishment according to different circumstances.

As different countries have different tax rates and different attitudes on double taxation, there is great potential for multinational corporations and their associated enterprises to manage their tax burden by adjusting the transfer price. But over the past few years, the world's major trading nations have slashed their corporate tax rates and closed the gap. According to KPMG's 2007 survey, the worldwide corporate tax rate fell by 12% to 26.9% from an average of 38% in 1993, and by 6.3% in 1997-2007. Across the globe, the OECD and the European Union saw the biggest drop, at 11.3 per cent. In addition, from the point of the situation in our country, in the new "enterprise income tax law" was promulgated before the enforcement of our country is the difference between tax rate of domestic and foreign enterprises, the new enterprise income tax law issued in 2007, with basic tax rate of domestic enterprises from enterprise income tax is 33%, foreign enterprises enjoy preferential, become a basic tax rate of both foreign and internal unity is 25%.

The United States is the first country in the world to establish the transfer pricing adjustment system between transnational related enterprises. As early as 1954, section 482 of the internal revenue code of the United States has regulations on the adjustment of unreasonable transfer pricing among domestic associated enterprises. In the early 1960s, the United States extended the application of the provisions in section 482 to the trade activities between transnational associated enterprises, and formulated detailed implementation rules in 1968, thus establishing the United States legal system for the adjustment of transfer pricing between transnational associated enterprises. After the United States, Britain, Germany and France have added provisions in their tax laws that allow for adjustments in the pricing of transfers between multinational affiliates. The U.S. and OECD efforts have led to reforms in other countries around the world, many of which have revised and strengthened regulations and practices on transfer pricing. Most of eastern and western European countries, as well as developing countries such as India, have laws based on OECD guidelines. Since the reform and opening up in the 1980s, tax authorities began to pay attention to transnational transfer pricing. At present, China's transfer pricing system covers both domestic and foreign transactions, direct and indirect taxes. The introduction of transfer pricing policy plays an important role in preventing the abuse of tax avoidance by transfer pricing mechanism. More than ten laws and regulations on transfer pricing among related enterprises have been issued in the form of "national tax payment", and special tax adjustment has been added in the enterprise income tax law. Besides, with the enactment of the income tax law in China, relevant laws and regulations on transfer pricing will be further improved.

Worldwide, the ey 2006 survey showed that 43 percent of respondents experienced one or two audits. Over the past three years, 62 per cent of respondents have experienced transfer pricing audits in Europe and 53 per cent in the asia-pacific region. And transfer pricing audits are not limited to suspect cases. Taking China as an example, China has built an anti-tax avoidance information management system in some regions, expanded the source channels of information, and enriched the anti-tax avoidance information database. For regions that do not use the anti-tax avoidance information management system, the "one-family" management of information is adopted. To realize maximum utilization and sharing of basic information on anti-tax avoidance. In addition, the state administration of taxation USES publicly available comparable transaction information in accordance with bilateral advanced pricing agreements and other multilateral pricing procedures. The state administration of taxation has also ordered the Bureau Van Dijk OSIRIS database, which contains information on all the companies in the world.

In order to avoid tax risks, a comprehensive review of transfer pricing is required, which requires the following procedures: first, confirm the transaction. This process refers to the compilation of transaction lists of companies within the group and overseas companies; Second, perform functional and risk analysis. Because the functions and risks of each party involved in intra-group transactions directly affect whether their fair price strategies can be accepted by the tax authorities. Therefore, the transaction between related companies and the Shared functions and risks are recorded in writing. Again, evaluate current pricing. Clarify current pricing methods and prices, prepare relevant documents, provide comparable data, and determine fair prices. If the pricing is reasonable, there is no change in the pricing method; if not, there is a change in the pricing method, but a reasonable written explanation must be given for the change. The analysis must include an explanation of how the transfer pricing policy produces fair results, or at least how the company's results reflect the principle of fair independent accounting. The analysis involves various methods of transfer pricing, as well as internal and external factors that affect the operation of the company.

Establish a special committee to ensure that transfer pricing issues are not ignored and that the company's increased deployment follows the transfer pricing provisions. The successful management of transfer pricing depends on the clarity of ownership of different responsibilities and rational allocation of financial resources. The committee includes the general manager, chief accountant, department manager and marketing manager responsible for assessing the opportunity cost and risk of various transfer pricing strategies. The decision of the committee reflects the company's strategic objectives and the concerted actions of all departments. The committee members fully consulted with the company on the transfer price and focused on the measurement and evaluation of implementation performance.

The widely accepted standard to judge whether the transfer price is reasonable is the price under the "normal transaction standard". In accordance with this principle, when confirming the reasonableness of a transfer price of a multinational company, the price formed by the transaction of two independent parties under similar sales conditions will be referred to other companies that have similar functions and industry characteristics and compete with each other. The process is fraught with difficulties: first, some of the transferred objects do not exist or lack comparable products or comparable transactions, such as highly monopolistic intangible assets; Secondly, even if there are similar comparable products or comparable transactions, most of any products have their own characteristics. There are elements that are monopolized by the company, or such products are transferred only within multinational companies. Again, different calculations lead to different prices. MNCS must overcome difficulties, integrate information, and, if necessary, use statistical methods to determine comparable uncontrolled prices, and keep ready to transfer pricing documents at the same time.

Reservation pricing agreements can be divided into unilateral agreements, bilateral agreements or multilateral agreements, which predetermine a set of appropriate criteria for the transfer pricing of the relevant transactions. In the 1990s, the United States, Japan and other countries began to use reservation pricing to solve the problem of transfer pricing tax administration. At present, some countries have made bilateral or multilateral arrangements as the main direction of appointment pricing. APA changed the transfer pricing tax risk management from "ex post facto adjustment" to "ex ante confirmation", reducing the time and cost for taxpayers and tax authorities in the stages of investigation, proof discovery, audit, review and litigation, improving the efficiency of the enterprise and controlling the tax risk in advance.

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