Associated Enterprises

Jian Li and Alan Paisey

Chapter 5 in Transfer Pricing Audits in China, 2007, pp 56-68 from Palgrave Macmillan

Abstract: Abstract Transfer pricing takes place between any two or more constituent parts of a company, at least one of which is based in a host country. By the adroit use of pricing the seemingly legitimate transactions which take place between them, the company can attempt to avoid its full fiscal liabilities. To frustrate such practices and preserve the due revenues under the prevailing laws of their country, a taxation authority in the country concerned must be alert to the need to identify the characteristics of a foreign company operating within its jurisdiction and to understand its modus operandi. This includes the need for a careful definition of the structure and ownership of multinational companies for the purpose of ascertaining relationships between their constituent parts that could give rise to opportunities for transfer pricing abuses. In addition they need to bear in mind the full range of assets that can be the subject of traffic between two constituent parts of the same company.

Keywords: Parent Company; Intangible Asset; Transfer Price; Tangible Asset; Related Party (search for similar items in EconPapers)
Date: 2007
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DOI: 10.1057/9780230595811_5

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