A Comparative Study Of The Transfer Pricing Adjustment

As the multinationals are becoming strong in the process of globalization, the phenomenon is domestically increasing that the multinationals use transfer pricing for tax evasion. Under its operation strategy, multinationals transfer profit from high-taxation country to low-taxation country by transfer pricing, in order to realize global profit maximum. In order to well protect the national income base from the economic globalization ,transferring price must be forbidden, it is a reflection of the national tax revenue dominion that price should be adjusted. according to the principal of the fair shake price .Transferring price breaks the principal of the equal market dealing, this action is not to avoid tax ,but in fact it evades one country's tax, so no matter whether transferring price is for saving or omitting the tax or not. If only it could do harm to the national tax income, it should be regulated by the state. The adjustment method of the international widespread usage induces to mainly have: Comparable uncontrolled price method, Resale price method, Cost plus method, Profit split method, Transactional net margin method, Comparative profits method and Advance pricing agreement, various methods all have theirs advantage and disadvantage. At using each adjustment method, China exist very big blemish, be fighting international multinational company to transfer price seem to be to lack the ability to do. Understanding transfer pricing correctly, comparing and analyzing the advantage and shortage of each adjustment method is significant to avoid the national revenue from tax runs off and protect our country revenue from tax benefits.Combining the theories research and the substantial evidence research, the text is composed of five parts: The first part of introduction summarizes the present situation which the development of the multinational company and its internal transaction grows day by day. The second part introduces the conception, main form and motivation of transfer pricing in brief, and explains no matter whether transferring price is for saving or omitting the tax or not. If only it could do harm to the national tax income, it should be regulated by the state. The third part introduces international currently ascend widespread use of each transfer pricing adjustment method and its principle. The fourth part analyzes each transfer pricing adjustment method the good and bad points and carries on the international comparison. Research OECD and American and Japan how to use each adjustment method and hold attitude to each method. The fifth part of union our national condition, analyzes the present situation and the characteristic which using transfer pricing of Chinese foreign investment enterprise,Aiming at the shortage of transfer pricing adjustment method used by China presently, discusses and pondered how will consummate various methods and its future development direction.