Case:
A multinational company is headquartered in the United States, and has three subsidiaries in Britain, France and China: A 1, A2 and A3. A 1 provides cloth for France A2. Suppose there are 1000 pieces of cloth. According to the normal market price of the country where A 1 is located, the cost is 2600 yuan per piece. This batch of cloth should be sold to A2 at the price of 3000 yuan per piece. Then it is processed into clothes by A2 and resold to domestic A3 and A2, with a profit rate of 20%; The tax rates of different countries are 50% in Britain, 60% in France and 30% in China. In order to avoid certain taxes, a multinational company sold A 1 to A3 in China at a price of 2800 yuan per cloth, then resold it to A2 in France at a price of 3400 yuan per cloth, and then sold it by A2 in France at a price of 3600 yuan.
Let's analyze the impact of this on the tax burden of various countries.
(1) Tax burden under normal trading conditions
A 1 income tax payable = (3,000-2,600) ×1000× 50% = 200,000 yuan.
A2 Income tax payable = 3000× 20 %×1000× 60% = 360000 (yuan)
For this transaction, the total income tax payable by multinational company A is = 200,000+360,000 = 560,000 yuan.
(2) Tax burden under abnormal trading conditions
A 1 income tax payable = (2800-2600) ×1000× 50% =100000 (yuan)
A2 Income tax payable = (3.6 million-3.4 million) × 60% =120,000 yuan.
A3 Income tax payable = (3400-2800) ×1000× 30% =180000 (yuan)
Then the total income tax payable by multinational companies =10000+120000+180000 = 400000 (yuan).
Compared with normal transactions, it saves tax: 560,000-400,000 yuan =160,000 yuan.
This kind of tax avoidance behavior is mainly due to the difference of tax burden between Britain, France and China, which provides a premise for taxpayers to transfer tax burden through transfer pricing.