Along with global integration, many multinational companies established set of management issues to ensure that the tax revenues of the national importance. Exchange links be construed as business transactions between associated parties . Which party is the party associated with the relationship directly or indirectly in the management, control or capital contribution or investment in any form.
Freedom comes from exchange agreement, the parties may offer lower or higher price than the market price. This aims to regulate tax obligations from where to where high tax rates have lower tax rates, reduce the overall tax liability and increase profit after tax by the parties .
Therefore, the need for water management related transactions based on a reasonable basis and can not rely on the consent of the parties. Taxable price of the related transaction is determined by the following methods :
The method compares the independent transaction price: based on the unit price of products in independent transactions to determine the unit price of traded products linked to these transactions is conditional similar transactions .
Resale price method : based on the selling price ( or the price ) of products sold to businesses by independent parties to determine the purchase price of the product from the link .
The cost plus method : based on the cost ( or price ) of products purchased by businesses from independent parties to determine the selling price of the product for the link .
Comparable profits method : based on the profitability of the product in independent transactions selected for comparison as the basis for determining the profitability of products related transactions as these transactions are trading conditions are equivalent.
Profit split method : based on profits from a transaction linked by many businesses aggregate links made to identify each profitable niche business in a way that links independent parties profit sharing in independent transactions equivalent .
Currently, the management mechanism based on voluntary tax returns and pay taxes . Similar to the related party transactions , multinational companies have to declare and pay the tax office during tax annual income .
Typically , companies choose valuation methods consistent with market trading conditions , with the source of information , data , data completeness and reliability to determine the transaction price .
Besides, the Law amending and supplementing a number of articles of the Law on Tax Administration dated 01/7/2013 effect added mechanism agreed upon method of determining the taxable price (called the APA - Advance Pricing Agreement ) .
According to the General Department of Taxation based on the request of the taxpayer or foreign tax authorities to decide APA negotiations .
Give exchange links on the right for the market to protect the interests of the nation but also bring a healthy competitive environment among enterprises together.
Dianam Legislation Committee