Raise Management Standards of Property Tax on Transnational Corporations/ Elever Le Niveau de Gestion Fiscale a L'egard des Entreprises Transnationales (Report‪)‬

With the continuous deepening and development of Chinese opening up, the size and quantity of foreign multinational companies investing in China is also increasing. According to the authority's statistics, the number of the foreign companies various branches set up in China has more than 5 million. Currently, there have been about 200 among the world's largest 300 transnational corporations investing in China, such as the U.S. Motorola, Coca-Cola, DuPont, IBM, P&G, German Siemens, Lufthansa, the Netherlands Philips, Matsushita of Japan, Korea's Samsung and so on. These foreign companies have played a very important role in the development of our national economy; we believe that foreign TNCs will shine in our country in the future. However, as a coin has two different aspects, when people objectively observe and think from multiple perspectives, people will discover that the surviving transfer pricing issues cannot be ignored. A large number of international transactions, which are made by TNCs subsidiaries or branches, are established in our country and a substantial part is internal trade, which provides a possible implementation of transfer pricing. The research on the TNCs import prices and export prices from 2003 to 2004 show that among the 1500 kind of products in 2000, the import price higher than the comparable average price is nearly 500 species, of which the highest was 1,000%. Export prices lower than the average price is 450, of which the lowest price only 5% of the comparable average price. Here the issues on transnational corporations "transfer pricing" will be discussed. Transfer pricing is the price, which is taken by TNCs family members in mutual business transactions. The sale of material between the parent company and its foreign subsidiaries, the prices of the components and the final product are transfer prices. The tax departments of every country in the world will carry out strict examination to transfer pricing because transfer pricing can transfer funds from one entity to another entity that can significantly change the tax revenue level of the local government. We can illustrate this through Table 1 data, parent company sales semi-product to foreign subsidiaries in high transfer prices and low transfer prices if the host country income tax rate is lower.