Transfer Pricing in China: Concepts, Controls, Practices, and Audit Assessment

Description

This book offers up to date insights into the exciting world of China’s extensive economic activity through the pervasive and often secretive practice of transfer pricing. It begins with an explanation of transfer pricing itself and goes on to explore how intricately it can infiltrate the trading practices of the commercial lives of both foreign companies in China and Chinese companies expanding to other countries. A review of the main industries in China also considers their possible future uncertainties. China has joined other authorities in actively legislating and organizing a regime to implement its arm’s length policy, as related in Part I of the book on concepts and controls. This is then followed by Part 2 which is devoted to a collection of cases showing the breadth and variability of companies actively seeking to maximise their profits, while Part 3 of the book gives a rare record of the order of priorities exercised by one hundred Chinese tax officers engaged in auditing company performance. The book ends with a summary of the future trends, and activities that regulatory authorities are likely to undertake. Front Matter ....Pages i-xxi Front Matter ....Pages 1-1 Contextual Considerations (Jian Li, Alan Paisey)....Pages 3-6 The Concept of Transfer Pricing (Jian Li, Alan Paisey)....Pages 7-13 Variable Terms and Conditions in Different Industries (Jian Li, Alan Paisey)....Pages 15-28 Chinese Business Models (Jian Li, Alan Paisey)....Pages 29-37 Transfer Pricing Methods (Jian Li, Alan Paisey)....Pages 39-46 Company Preparation (Jian Li, Alan Paisey)....Pages 47-64 Policy Development on Transfer Pricing (Jian Li, Alan Paisey)....Pages 65-72 International Tax Risks and Chinese Enterprises (Jian Li, Alan Paisey)....Pages 73-76 Front Matter ....Pages 77-77 Using the Profit Split Method for Intangible Assets (Jian Li, Alan Paisey)....Pages 79-81 Unfair Cost Sharing (Jian Li, Alan Paisey)....Pages 83-86 An Issue for a High-Technology Company (Jian Li, Alan Paisey)....Pages 87-91 Falling Transactions with Rising Fees (Jian Li, Alan Paisey)....Pages 93-97 Tax Haven Victim (Jian Li, Alan Paisey)....Pages 99-103 Exports on the Cheap (Jian Li, Alan Paisey)....Pages 105-106 System Design for a Pharmaceutical Company (Jian Li, Alan Paisey)....Pages 107-112 Expansion into Asia (Jian Li, Alan Paisey)....Pages 113-114 A Company Converting to Realism (Jian Li, Alan Paisey)....Pages 115-119 Footsteps to Fortune (Jian Li, Alan Paisey)....Pages 121-123 Dates of Payment as an Asset (Jian Li, Alan Paisey)....Pages 125-126 Obvious Methods May Not Apply (Jian Li, Alan Paisey)....Pages 127-128 Clearly Exported Profits (Jian Li, Alan Paisey)....Pages 129-130 The Intricacies of Transferring Service Assets (Jian Li, Alan Paisey)....Pages 131-135 Supermarket Implants (Jian Li, Alan Paisey)....Pages 137-139 Investigation of High-Profit Company (Jian Li, Alan Paisey)....Pages 141-143 Research and Development in Beijing (Jian Li, Alan Paisey)....Pages 145-147 Outbound Service Fee Payment in Qingdao City (Jian Li, Alan Paisey)....Pages 149-152 Value Chain Analysis Investigation in Shenyang City (Jian Li, Alan Paisey)....Pages 153-155 A Linear Regression Approach for Adjusting Transfer Pricing (Jian Li, Alan Paisey)....Pages 157-158 Resale Prices in Test of Transfer Pricing (Jian Li, Alan Paisey)....Pages 159-160 Transfer Pricing Adjustments and Differential Products (Jian Li, Alan Paisey)....Pages 161-162 Significant Payments of Royalties (Jian Li, Alan Paisey)....Pages 163-164 Domestic-Related Company Transactions (Jian Li, Alan Paisey)....Pages 165-166 Royalty Fees Transferring Profits (Jian Li, Alan Paisey)....Pages 167-167 Global Financial Crisis Only an Excuse (Jian Li, Alan Paisey)....Pages 169-170 Front Matter ....Pages 171-171 Direct View of Priorities (Jian Li, Alan Paisey)....Pages 173-184 For the Future (Jian Li, Alan Paisey)....Pages 185-189 Back Matter ....Pages 191-193