On Special Tax Adjustment Methods Of Transfer Pricing In China Under Dual Background

Under the dual background of the international anti-tax avoidance wave promoted by "BEPS action plan" and the international tax competition wave led by "trump tax reform",it is very important to reform our tax system,including special tax adjustment system.Based on the theory of international anti-tax avoidance and international tax competition,this paper discusses the adjustment method of transfer pricing in China.We need to address not only the erosion of the tax base caused by corporate tax avoidance,but also the new task of optimizing the business environment and making our tax revenue more competitive.On the one hand,although our country in order to cope with the tax base erosion,actively promote the BEPS action plan,and with the multinational enterprises "enterprise architecture" is becoming more and more complex,the form of transfer pricing by through the "tangible" tax breaks to through "intangible assets","labor" tax avoidance,the existing "independent" ofthe transfer pricing special tax adjustment method makes the tax authorities often stretched in the process of auditing and difficult to deal with;On the other hand,even though our country through tax cuts JiangFei optimize business environment policies,actively response to the "tax reform" trump international tax business environment brought by the competition of new challenges,and the existing "independent" ofthe transfer pricing special tax adjustment method USES the complexity and variability,makes the enterprise tax officials cannot accurately selecting what is "appropriate special tax adjustment methods of transfer pricing",transfer pricing tax adjustment,enterprises have a certain degree of uncertainty,a lot of tax risk.This paper studies the difficulties brought by the "independent transaction law" to enterprises and tax authorities,and introduces the "formula distribution method" to optimize the special tax adjustment method of China’s transfer pricing,which has important theoretical and practical significance for enterprises and tax authorities.From the perspective of scholars,this paper USES literature research method,theoretical analysis method and case analysis method to deeply analyze the existing "independent transaction method" transfer pricing special tax adjustment method.The concepts of "transfer pricing","independent transaction law" and "formula distribution law" are defined.Using the "tax equity and efficiency theory","BEPS theory" and "tax business environment competition theory",this paper analyzes the difficulties existing in the process of special tax adjustment of transfer pricing from two perspectives.Firstly,the existing "independent trading method" and the potential supplementary method "profit distribution method" are analyzed theoretically.On the one hand,the main points and matters needing attention of the existing methods are clarified,and the adjustment steps and matters needing attention under "price method" and "profit method","comparable uncontrolled price method","resale price method","cost addition method","trading net profit method" and "profit division method" are analyzed theoretically.On the other hand,it explores the advantages and disadvantages of the formula distribution method in the process of its promotion to the international market.Secondly,from the perspective of cases,this paper explores the dilemma of "enterprises" and "tax authorities" under the "independent transaction law".This paper selects the transfer pricing cases of large transnational groups to analyze the dilemma of "enterprises" and "tax authorities" under the existing "independent transaction law".Multinational groups evade taxes through complex enterprise structures and "intangible assets",making it difficult for tax authorities to make reasonable adjustments through the "independent transaction law".Multinational enterprises are also unconvinced about the penalty imposed by tax authorities,and have applied for appeals for many times.Thus it can be seen that the complexity and uncertainty of "independent transaction law" has caused great trouble to tax authorities and multinational enterprises.Finally,according to the shortcomings of the case analysis,this paper proposes the introduction of "formula distribution method" to optimize the transfer pricing adjustment method in China for the first time.The "formula distribution method" was first piloted as a supplementary method,and after successful piloting,it was gradually introduced to the whole country as a special tax adjustment method for transfer pricing that paid equal attention to the "independent transaction law".For the government,the introduction of "formula distribution method" can make the tax process easier and more efficient.For enterprises,the tax result is clear and the tax is fairer.Certain tax outcomes and adjustment criteria also make taxes fairer.