A Study on Transfer Pricing Strategy: Dual Objectives of Optimizing Tax Liability and Maximizing Profit

• Main Authors: Liou, Sin-Jhu, 劉馨筑
• Other Authors: Tsui, Wai-Cho
• Format: Others
• Language: zh-TW
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/4h37ja

碩士 === 中國文化大學 === 會計學系 === 102 === Transfer pricing regulations imposed by tax authorities across countries have be-come increasingly stringent. Multinational corporations have thus amended their transfer pricing strategies looking for tax burden minimization and profit maximization purposes to the achievement of optimal taxes. In recent years, Mainland China promotes infrastructure and real estate investment, With its rapid economic development, China demonstrated a high degree of development trends in the demand of its China's cement product. The Chinese market also becomes more and more important in the development of the cement industry in Taiwan. In this thesis, we establish a virtual multi-national cement enterprise in Taiwan.Based on its hypothetical operation data, simulations are performed to study the transfer pricing strategy of Taiwan’s cement industry which invests in China. A mixture of the Profit - Split Method and Cost Plus Method is employed to find a solution to the target of balancing optimum tax burden and profit. The simulation results show that: transfer pricing strategies vary when facing different situations. It is difficult to identify to “an optimal combination” for all cases. A best strategy is the outcome after taking all relevant factors into considerations.