The Research Of Group A For Transfer Price Under BEPS

Changing business environment,free capital and labor,and development of electronic economy raise the challenges to global tax regulation.Base Erosion and Profit Shift is one of the hot topics discussed and concerned globally including China.Transfer pricing is the most common approach of Tax planning and BEPS behavior in multinational companies.Some multinational companies take aggressive transfer pricing actions to transfer profit to overseas under imperfect Chinese tax mechanism.With China stepping into post-BEPS times,Chinese tax policy reform and higher transparency will bring challenges to most multinational companies in China.The Group A is a Fortune 500 MNC and one of the world's largest petroleum & natural gas enterprise,with its subsidiaries all over the world and its headquarter in the USA.As the tax regulation on transfer pricing as well as the BEPS projects is highly developing in the Chinese market,the Group A is facing more challenges in the tax planning and BEPS behavior.This paper firstly introduces the transfer pricing theory and common methods with its motivation.Also,this paper summarizes the OECD BEPS projects and discusses China's stance on BEPS and its localization to tax regulations.Based on case study of transfer pricing strategies of China affiliates of A multinational group,this paper analyzes how China BEPS related tax policies potentially impacts to A multinational company subsidiaries in China in different aspects such as tax related risks,new challenges and long term influences;In addition,this paper discusses how multinational companies in China can learn from the case study to improve transfer pricing strategy with strengthened corporate governance and setup of risk assessment system to survive in new tax regulatory environment.