Dynamic Analysis of Multinational Corparation Transfer Pricing and Shareholder Investment Performance

• Main Authors: Huei-chang Huang, 黃慧嫦
• Other Authors: Wen-Chin Wei
• Format: Others
• Language: zh-TW
• Published: 2011
• Online Access: http://ndltd.ncl.edu.tw/handle/98550848729181443194

碩士 === 國立高雄應用科技大學 === 商務經營研究所 === 99 === Due to the issue of transfer pricing, global tax authorities have made corresponding regulations toward the multinational corporations (MNC) on auditing transfer pricing policy and applied related measures in anti tax avoidance, so as to prevent the taxation right. This empirical research, based on case analysis, referred to difference analysis and research of intra-organization managements and activities, is to find out how to make reasonable intra-transaction price as well as to maximize profit at the same time, so as to avoid paying tax evaded from “Non-Arm’s-Length Transaction”. On inspecting the organization management structure, and industrial characteristics, the purpose of this study lies in what operation goals the MNC could achieve, and how the performance would be. By data from Taiwan Economic Journal (TEJ) Database of domestic publicly traded company financial reports from 2003 to 2009, this study uses software SPSS to discuss the transferring degree of “Pre-tax Net Benefit (PTNB) Income” influenced by intra-transaction on accounts, such as “Foreign exchange gain/loss”, “Operation expense - wages”, “Investment income recognized under equity method”. In addition, enterprise globalization could manage in cost-effectiveness by “International Industrial Specialization” as well as to make tax-planning, so as to achieve the operation goals and profit maximization. This study, applied methodology of “System Dynamics”, via the dynamic analysis of proxy determinants, is to simulate how the enterprises operate to decide proper methods and overcome obstacles in order to achieve their goals. Conclusion found are as follows: (1) Significant positive correlation exists between PTNB and accounts of “Foreign exchange gain/loss” and “Investment income recognized under equity method”. (2) No significant correlation exists between PTNB and “Operation expense - wages”; which might, in this study’s opinion, result from the different wage bases before/after 2007, for the policy “Expensing Employee Bonus” carried out in 2008. (3) While both “human resource cost (HRC) difference from two spots” and “exchange rate of the priced currency from parent company import” fluctuate significantly; there exists a positive influence on “Goal Net Operating Profit (GNOP)”. (4) Under less 1% “Exchange Rate Fluctuation”, the singular factor of HRC has significant positive influence on GNOP. (5) Shifting of “Income Tax Rate” from 17% to 25% make negative influence on “Shareholder Investment Performance (SIP)”. (6) The simulation system also shows that “promotion of performance bonus”, “expenses on research and development” would result in positive correlation either on GNOP or SIP. Suggestion toward the management level from this study as follows: (1) Setting up a “System Dynamics feedback causal loop diagram”, so as to analyze the intra-corporation transfer pricing and practice. (2) To establish proper “foreign exchange risk management” mechanism. (4) To do proper management of weighted index. Keywords: Transfer Pricing, System Dynamics, International Industrial Specialization, Profit Maximization, Operation Goal, Shareholder Investment Performance