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Response to anti-tax avoidance investigation and advance pricing negotiation
The reasonability of the related party transaction and its pricing has been much concerned by the PRC Tax Authority. Provision of the insufficient materials proving the reasonability of pricing principal and approaches between the related transactions may face serious punishment by the PRC Tax Authority. On this aspect, we can assist in searching for the independent comparable third party, function analysis, economic analysis; determining reasonable transfer pricing approaches; providing support with the respect to the law and data for the related transactions; representing the clients to negotiate with the tax authority, composing (Explanation on Related party Transaction) submitted with the tax authority.
From the aim of reducing tax exposure, to determine the pricing between the related party transactions, an advance pricing approach could be adopted by the clients whose organizational structure is complex and related transaction is frequent. The Advance Pricing has to go through many stages, generally with a period of more than one year to complete, i.e. preparation, application, assessment, negotiation, signature and supervision. During the negotiation stage, enterprises are requested to provide a plenty of materials and responsible for explanation. If the above are not appropriately handled, enterprises will suffer losses accordingly. To this point, GORICINDA will provide a full- ranged tax agent service, achieving the interest to the maximum and enabling enterprises to avoid potential transfer pricing risks.
