Research On Risk Management Of M Company's Internal Transfer Pricing

With the rapid development of the global economy,a series of business activities such as alliances between companies and mergers and acquisitions have begun to enrich.While the scale of companies has begun to accumulate and expand,the trend of changes in company organizational forms has gradually changed from simple and single to diverse and complex.For large group companies with abundant commercial activities,huge industrial scope,and complex organizational forms,optimizing the allocation of internal resources within the company is more and more important for maximizing the company's revenue.Therefore,commodity trade,that is,internal transactions,has appeared within the company.The transaction price determined in the process of internal transactions is internal transfer pricing,which plays a decisive role in the company's production and operation.Its basic characteristic is that it is free from the constraints of supply and demand in the general market.Therefore,internal transfer pricing has many risks.With the wide application of internal transfer pricing in companies,more and more scholars have studied the methods,purpose of use,and risk management of transfer pricing.However,the risk management aspects of internal transfer pricing are mostly empirical studies.The main body of research is the tax risk of transfer pricing in multinational corporations.There are few researches on the risk management of transfer pricing in domestic group companies,and case studies are even rarer.Based on this,this paper specifically studies the risk management of internal transfer pricing in the form of case studies.Select M shares.a leading enterprise in the iron and steel industry,as the research object,obtain internal transaction data of M company.through the company's official website and self-media,start with pricing methods and objectives,and use risk management methods to identify M company.What are the risks of internal transfer pricing,and evaluate the risk.Through analysis,the research conclusion of this article is that in M's internal transactions,there are certain audit risks,business risks and tax risks due to uncertain pricing methods and unreasonable use purposes.Finally,this article proposes that M company.should establish a sound internal control system for internal transactions,audit the company's internal transactions in accordance with external audit standards;establish a credit evaluation agency within the company to evaluate whether to continue transactions with related parties;and apply for an appointment with the tax authority Measures such as pricing arrangements to deal with the risks faced by internal transactions.Through the analysis of this article,it provides suggestions for government agencies to formulate policies and improve rules and regulations in internal transfer pricing supervision.In addition,through research,it is found that this paper can promote the application of previous internal transfer pricing theory research and enrich the theoretical research on internal transfer pricing risk management.Finally,I hope that the risk management conclusions of this paper are not only applicable to M company,and even the steel industry,but also useful for other companies and industries.