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Title: An empirical study of tax audits in China on international transfer pricing
Author(s): Chan, Koon Hung 
Author(s): Chow, L.
Issue Date: 1997
Publisher: Elsevier
Journal: Journal of Accounting and Economics 
Volume: 23
Issue: 1
Start page: 83
End page: 112
This research studies how Chinese tax authorities implement international transfer pricing legislation. The analysis indicates that tax audits on transfer pricing are confined mainly to medium- and small-sized foreign investments, lower-technology companies and transfer of tangible goods, and tend to focus on certain nationality and forms of foreign investment. Persistent losses, low profitability and lack of local partners in joint venture management most often trigger tax audits. The authorities focus on profit results rather than prices, and often use comparable profit method to adjust income. Tax differentials do not appear to be the most important inducement to transfer pricing manipulations.
DOI: 10.1016/S0165-4101(96)00445-4
CIHE Affiliated Publication: No
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