The Comparative Study Of Transfer Pricing Tax System Between China And U.S.A

In these decades, the economy of our country has developed fast and continuously, the comprehensive national strength strengthened, and the people live are more richer. All the achievements are depending on our economic policy of attraction foreign capitals to a great extent. From 1992 to 2008, China has been the first country which absorbs the most foreign capital in the world for 12 years. The foreign capital has not only remedied the deficiency of the fund in the modernization of our country but also brought advanced production technology, advanced management thought, brand-new management theory. However, we can't ignore its negative effect while seeing front effect of the foreign capital. The overseas-funded enterprises are enjoying a great deal of tax revenue preferential policies in our country, business scale is expanded year by year, but the profit rate is less than satisfactory, even they have suffered the loss by a large scale, tax amount presents the downward trend. So we can infer that these enterprises may evade Chinese tax duty in every kinds of method. The most frequently used method is transfer pricing among all the means in international evading tax. Transfer pricing tax evasion has already been concentrated from the beginning of the 20th century. The U.S.A. is the first country who prevented this behavior through legislating. So far, the U.S.A. has already formed the complete tax system on transfer pricing in the world. Chinese transfer pricing legislation started relatively late, but through exploration and completion for several decades, Chinese national tax agency issued a new tax rules《pays taxes, especial adjusts implementing methods (try)》in January 8th 2009.It is the latest rules in China about transfer pricing, and it makes a great stride forward in the legislative process of transfer pricing of our country. However, compared with the U.S.A., great disparity still exists in the transfer pricing tax system of our country. This text starts with the basic transferring pricing theory, analyzes the difference of tax systems of transfer pricing between China and U.S.A., finds out the existing problem in transfer pricing tax system, and suggested the corresponding countermeasure.This text is divided into five parts:Chapter one:Introduction. At first introduced the selected title background, secondly introduced the research contents, writing thinking, and analyzed from legislation, enforcement and punishment to relevant personnel respectively. Finally, explained the innovation and shortcoming of the text.Chapter two:Relevant theories of transfer pricing. Introduce the background, function of transfer pricing, the basic content of transfer pricing tax system. Transfer pricing tax system mainly includes:the cognizance standard of associated enterprise, adjusting method of transfer pricing, relevant text preparation, penalty clause, APA, tax check on transfer pricing and relevant contents such as staffing.Chapter three:Comparative analysis of the transfer pricing tax system between China and U.S.A. At first introduced the development procedure of transfer pricing tax system in China and U.S.A., then analyzed the differences and problems in the content, enforcement exiting in China.Chapter four:Suggestions to Chinese transfers pricing tax system. These suggestions include:improving the transfer pricing regulation content, strengthening the management to the multinational-corporation, building practical APA system fit for China, setting up a new team with advanced professional knowledge against tax evasion, strengthening the punishment to relevant persons and making more internal and international cooperation.Chapter five:Conclusion. Through the analysis above, we can find out, although this problem has already got more and more extensive attention in recent years, and China has made preliminary effect in anti-tax evasion, the transfer pricing tax system of our country still needs to be enriched and perfected. Every person and department should make a good effort to safeguard the national benefit of our country. Meanwhile, we must realize, the tax law is issued for a short time, perhaps it still exist some new problems. So China should supervise the process of operating, and give corresponding adjustment constantly.