Corporate Case Study on Transfer Pricing Strategies

• Main Authors: Chia-Hua Lin, 林佳樺
• Other Authors: Li-hua Kao
• Format: Others
• Language: zh-TW
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/60291447862192505991

碩士 === 中原大學 === 會計研究所 === 97 === Abstract In the trend of globalization, transfer pricing has become an important aspect of corporate international tax planning. As such, every government is making regulations to prevent corporations from avoiding tax liabilities via multinational trades. Take Taiwan’s nearby countries for example such as China, Japan and South Korea, they have legislated regulations of transfer pricing on multinationals in the past few years. In recent years, developed countries have become more and more focused on the legislation and execution of transfer pricing. Transfer pricing is no longer simply a tax issue but rather directly affecting the operational management and profitability of a company. Therefore, corporations must make good planning on transfer pricing in advance and review it constantly on a sustainable business model basis. In the case of the operational structure of this case-study company, the ability of expanding its operational points is stronger than that of other small- and mid- sized companies. As such, the case-study company has relatively better flexibility and advantage when deploying its global transfer planning strategy. The main motivation of this study is to find out how to choose a way of setting up the transfer pricing plan which is efficient, easy-to-follow, and easy to be assessed as legal by the tax authorities with easy-to-obtain data under various circumstances of international standards. The conclusions of this study are: 1. Corporations must get familiar with the content and requirements of transfer pricing regulations and must fully understand respective tax authority’s auditing practices and attitude. 2. Corporations need to establish a sound tax management platform and system from the standpoint of overall company and local practical needs. 3. Corporations should cover both the practical operations and the cost benefit of taxation on the issue of profit allocation. 4. Corporations should make reasonably adequate effort to establish a transfer pricing policy which meets the requirements of regular trading principles based on the regulations of different tax areas. 5. Corporations should cooperate properly with the auditing of tax authorities. 6. Corporations should hire good professionals to conduct corporate tax management and seek for professional consultants’ advices when needed.