The Exploration of Transfer Pricing Report in Multinational Enterprises – a Case Study of Local Companies

• Main Authors: Li Fen Lee, 李麗芬
• Other Authors: 陳光谷
• Format: Others
• Language: zh-TW
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/63179732153884435383

碩士 === 國立彰化師範大學 === 會計學系企業高階管理 === 96 === In recent years, due to the trend toward internationalization and globalization, the economic activities among nations have been increasing. With the trend of the world and the rise of markets in Mainland China, the businesses from Taiwan have been actively established world-wide, Therefore, the transfer pricing of multinational transaction among subsidiaries has been issues that the enterprises and the Tax Institution in every country are most concerned with. In Taiwan, Regulations Governing Assessment of Profit-Seeking Enterprise Income Tax on Non-Arm’s Length Transfer Pricing was enacted by the Ministry of Finance on December 28th 2004, which has had a general rule for the implementation of transfer pricing, the appropriate methods, the subjects for auditing, as well as the mechanism of advanced pricing negotiation system. However, in practice, problems are confronted concerning the adoption of the transfer pricing method, database, the comparable subjects, and sampling in companies. Discrepancies exist between the two related parties regarding the implementation of the auditing regulations of irregular transfer pricing. Thus, how to propose a perfect transfer pricing report to reduce the tax risks has become an important issue of concerned businesses. This study uses descriptive and case study methods and aims to investigate the substantive transactions between the case companies and their subsidiaries according to the laws and regulations. In addition, comparable subjects are searched for by respective monitored transactions to create a search model and a database as well as the range of regular transactions. Finally, the results of monitored transactions are verified to see if they are conformed to regulations. This study makes the following suggestions according to the conclusions stated above. 1. The enterprises should take into account the reasonability of the profit distribution of the corporate group, analyzing the transfer pricing functions and establishing transfer pricing strategies when they transact business between subsidiaries. 2. The enterprises should have specific norms of processes and conditions for choosing comparable samples. The transfer pricing report and the screening processes should be consistent and clear enough based on making reasonable hypotheses as well as bases and seeking sufficient evidence to draw conclusions.