Multinational Corporation's Transfer Pricing and Performance Assessment in a Perspective of International Supply Chain

摘要

Multinational corporations have been exploiting transfer price to achieve optimum profit worldwide.Therefore,how to choose the right transfer price which could realize the utmost total profit of the corporation has become the academic focus.In a perspective of international supply chain,this paper sets a model of deciding transfer price between a multinational corporation's two subsidiaries in different countries.The two subsidiaries are considered as an international supply chain,and there's a domestic supply chain in country A.Two supply chains compete with each other in the country's same market.Considering not only the market condition but also tax conditions of country A and B,such as income tax,tariff,value added tax,this paper utilizes game theory to solve two supply chains' competition and finally gets the conclusion:a multinational corporation's best transfer price is decided by the quantitative relations of two countries' income tax,tariff and value added tax.Additionally,in specific quantities relations,transfer price could have no impact to increase multinational company's total profit.This paper has sense in guiding multinational companies to adjust their transfer price to government's tax conditions.