A Case Study Of Royalties Tax Avoidance For The Multinational Group G

With the development of the digital economy,intangible assets participate in economic activities as basic production factors and play an increasingly important role,such as patent rights,trademark rights,and operating franchise have become the new engine of economic growth.Intangible assets often form franchise fees as high value-added transaction objects.However,the complexity of the digital economy has made the transactions of intangible assets hidden and the authorization of royalties has become blurred.To a certain extent,the digital economy provides facilities for multinational corporations to use the royalties to avoid taxation.Adoption of multinational group G tax avoidance through royalties,we can deeply explore ways and means of using the royalties to avoid tax and solve some difficulties in anti-tax avoidance work on royalties,and provide feasible suggestions for further improvement of anti-tax avoidance.This paper firstly analyzes the tax avoidance path of the multinational group G holdings three subsidiaries.The three subsidiaries are W Chinese Co.Ltd,R American Co.Ltd,H Italian Co.Ltd.The first path is that G Group established an intangible asset licensing company in a tax haven and transfer the profits of W Chinese Co.Ltd to tax havens through royalty transfer pricing.The second path is that R American Co.Ltd use the complexity of digital technology to turn royalties into system operation and maintenance fees to avoid withholding tax.The third path is that H Italian Co.Ltd established indirect conduit company DH Hong Kong Co.Ltd to enjoy preferential tax rates for continental and Hong Kong tax treaties?Then the difficulty of the case is analyzed and the solution is given.Finally,some feasible suggestions are put forward for the anti-tax avoidance of royalties.The establishment of preferential tax policies on a regular basis to assess,exit mechanism to prevent multinational enterprises from using high-tech enterprises transfering pricing in royalties;Constructing risk-specific indicators and establishing a digital economic tax research team to guard against the costs of multinational enterprises using digital technology to convert royalties into other names;Actively implement the BEPS action plan and strengthen the international tax information exchange to prevent multinational enterprises from abusing tax agreement.