The methods of using transfer pricing for international tax planning include:
1. By controlling the import and export prices of parts and raw materials to affect the costs of related enterprises;
2. The parent company directly affects the product costs allocated to the subsidiary through the sale price of the subsidiary's fixed assets. The depreciation of fixed assets stipulated by the parent company, the length of the period, and the amount of depreciation fees withdrawn in each period will all affect its profits;
3. The parent company controls intangible assets such as patents, proprietary technologies, trademarks, and manufacturer names, etc. The varying royalties collected from the transfer of assets have an impact on the costs and profits of subsidiaries;
4. Affect the costs and expenses of products through the provision of loans and interest;
5. Affect the costs and profits of subsidiaries through technology, management, advertising consulting and other labor costs;
6. When using product sales, give higher or higher fees to the sales agencies of the subsidiary system. Lower commissions and rebates affect the company's sales revenue;
7. The parent company uses the transportation system it controls to influence the company's sales by charging higher or lower transportation, handling, and insurance fees to its subsidiaries. The cost of sales of subsidiaries;
8. Ask more administrative expenses from subsidiaries and spread them into the subsidiary's product costs, which can be reduced in the company's income.
"Company Law of the People's Republic of China"
Article 5
Companies must abide by laws, administrative regulations and social ethics when engaging in business activities , business ethics, honesty and trustworthiness, accept supervision from the government and the public, and assume social responsibility. The company's legitimate rights and interests are protected by law and shall not be infringed upon.