Research On Risk Analysis And Management Of Transfer Price Policies Of Corporation F

Transfer price is the inside price of the enterprise group which is determined by theactivities happened between parent company and subsidiary company or betweensubsidiary companies. These activities includes selling products or acting as agent,providing business, transferring technology and loaning captain, etc. During the process ofthe transfer pricing, because of the decision maker’s variant consideration, the price isusually not determined by the transformation of supply and demand relation in market orthe principle of independent competition. With China’s opening during the Reform andOpening-up near40years, a large amount of multinational corporations were rushing intoChinese market, while transfer pricing is usually a key part of their investment policy. Themain reason of transfer pricing here is for tax avoidance or caring tax avoidance.It is a legitimate right to adjust profits amount the stakeholders in the enterprise byapplying the transfer pricing policy. However, if the transfer pricing policy they made isbeyond some specific standards, it is certain that the tax authority will concern orinvestigate it, which will lead to huge legal risk.This article is analyzing the function and risk during the connected transaction ofCorporation F, and evaluating the determination and application of Corp. F’s transferpricing policy by reasonable method of transfer pricing and the comparable information, toreveal the subsequent risk, therefor to provide accordant strategies to minimum risk inleveraging transfer pricing policy legally.