International transfer pricing for business operations in China: Inducements, regulation and practice
Author(s)
Author(s)
Chow, L.
Date Issued
1997
Publisher
Wiley
Journal
Journal of Business Finance & Accounting
Volume
24
Issue
9-10
Start page
1269
End page
1289
Abstract
This paper provides an empirical analysis of international transfer pricing in the People's Republic of China. The examination of the business environment in China reveals a mixed inducement for transfer pricing decisions by foreign investment enterprises (FIEs). The legislation on transfer pricing in China is similar to that of its major trading partners. Competition among local governments for foreign investment, inadequate resources for tax enforcement, and inadequate documentation by taxpayers hinder tax audits on transfer pricing. An analysis of aggregate import and export data does not support the allegation that, in general, FIEs shift profits out of China by over-pricing their imports and under-pricing their exports. However, there was some evidence of outward income-shifting in certain key sectors.
SFU Affiliated Publication
No
Availability at SFU Library
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