The study on Transfer Pricing based on Profits Method--- example of C Company

• Main Authors: Wen-Cheng Wang, 王文拯
• Other Authors: none
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/55298336558317448892

碩士 === 雲林科技大學 === 企業管理系碩士班 === 98 === This thesis investigates the controlled transaction between the case-research company and it’s related enterprises which based on the current policy and regulation. Furthermore; the thesis is totally on the impartial foundation and combines the current regulation and the company which pursuant to this regulation. Not only contains finished products, semi-finished products integrate with each other cope suppliers, but also contains the operation to provide guidance and production technology, that is including the licensing and production for know-how intangible assets such as supply, lacking of suitable comparable objects, hoping the profits-split methods can provide the best resolutions.(Residual Profit-Split Method). Firstly, according to business function analysis, divided each company’s deserved profits from related company’s amalgamation surplus, and then create a residual income based on each company to create the basis of intangible assets - cost of labor and the research and development spending, as separate factors, the remaining proportion of profits allocated to each enterprise. In other words, Firstly, Using any other sub-routine activities, income to value it’s available. Secondly, to allocate the remaining income in all relative value of intangible assets contributed. Finally, to make a comparable profit method to confirm the range of Arm’s Length Principle based on Residual Profit-Split Method is suitable for the aforementioned theories. The results shows that in this case study, the company no matter confirm by residual profits-split methods or the comparable-profits methods, they have to face the risk from the tax authority to adjust their taxes, and in the calculation of residual profit split method, by adjusting transfer pricing, the controlled company''s operating margin comparable profit method in the calculation of regular trading profits of the average interval is near the upper and lower limits of the same inspection for a suitable division factor. Taiwan’s current transfer pricing system, since lacks of confidence from the tax authority or the report, or immature technology on the audit, causing the government and taxpayers have lots of dispute and disagreement. Hoping with this study to provide the reference to related-authorities to make or revise the law, regulation or practical implement and promote the tax reform in Taiwan.