International Transfer Pricing
The laws and regulations of many countries clearly stipulate that transfer pricing shall follow the Arm's Length Principle, that is, transfer pricing shall refer to all parties of the transaction that are not related to each other, and business transaction pricing shall be carried out in accordance with fair transaction price and business practice.
If the transfer price is very different from the prevailing market price, and the proportion is not proportional to the company's business, it may cause the local tax authorities to picket. Through the principle of the independent transaction, tax regulatory agencies can calculate the amount of tax that enterprises should pay under the normal market price, and pursue and find the part that enterprises do not pay enough.
Some multinational enterprises make use of global transfer pricing consultant to achieve tax savings, which eventually arouse the suspicion and investigation of the tax bureau, and pay a heavy price.
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