| With the deepening of world economic integration and the continuous integration of multinational company functions and services,more multinational groups provide services such as centralized professional,technical,administrative to related companies within the group through headquarters holding companies,to achieve the purpose of integrating resources,improving efficiency and reducing costs.The important consensus reached in the G20 taxation reform is to levy taxes in accordance with the economic substance and avoid double non-taxation.However,under aggressive tax planning,the labor costs in the group may not meet the risk of independent transaction principles,tax base erosion and profit transfer.In the transactions between multinational corporations that provide internal labor services to each other,the tax authorities require the enterprises to determine the price of all labor services within the group using the principle of independent transactions,which is very burdensome for both taxation enterprises and will consume a lot of time and energy.work.For low-value-added group services included in the group’s services,due to its low value-added characteristics,the tax authority’s management cost of applying such independent services to handle such services may be much higher than the transfer pricing from this part of the services Taxes earned in adjustments.Applying simplified rules when dealing with low value-adding services can provide tax authorities and taxpayers with certainty,improve the management efficiency of tax authorities in handling such matters,and reduce the compliance costs of taxpayers.It is recommended that simplified rules be applied to intra-group labor services to achieve a balance between appropriate fees for low-value-added intra-group labor services and the compliance expenditures of multinational group headquarters,while protecting the tax base of the paying country.OECD organizations,several EU members states and other countries have implemented simplified rules in intra-group labor transfer pricing rules.It is suggested that this type of tax-related treatment in China is in line with international standards,and the content of some foreign rules should be used for reference,and simplified rules should be introduced in accordance with China’s specific conditions. |
