In the field of international taxation, companies' actions to reduce their tax burden through fictitious transactions or manipulation of transfer pricing may involve the risk of tax avoidance or evasion. Many methods have been expressly prohibited by multinational laws and international agreements. The following are objective explanations of relevant technical means and legal risk warnings. They are for academic discussion only and do not constitute any suggestions.： ###1. Common operating modes of transfer pricing 1. **Transfer of pricing power of intangible assets** Enterprises transfer the ownership of intangible assets such as patents and trademarks to affiliated companies in low-tax places, and transfer profits in the form of royalties. For example, an Irish subsidiary obtains intellectual property rights at low prices and charges high licensing fees to high-tax countries. 2. **Related service fee pricing** The headquarters charges excess management service fees (such as market research and administrative support) to subsidiaries in high-tax countries, and the service pricing is significantly higher than the market level. The OECD requires such fees to meet the "beneficiary test". 3. **Supply chain reorganization** Set up procurement centers or distribution centers in low-tax areas to achieve profit transfer through mark-up sales. For example, a Swiss trading subsidiary purchases from a Chinese factory at a low price and resells it to the European market at a high price. 4. **Debt restructuring arrangements** Through the means of capital weakening, subsidiaries in high-tax countries pay excess interest to related parties in low-tax countries. Most countries set debt-to-capital ratio limits (usually 1:1 to 3:1). ###2. Common forms of fictitious transactions 1. **Circular trade structure** A three-party trade contract with no physical delivery of goods is signed between affiliated enterprises, and deductible costs are created through false transaction flows. After China's value-added tax reform in 2018, it has increased its inspections of such "golden ticket" transactions. 2. **Virtual R&D cost sharing** Multinational enterprise groups allocate the R&D costs actually incurred in high-tax countries to low-tax entities through cost-sharing agreements (CSA), eroding the tax base of high-tax countries. 3. **Insurance company arrangement** Set up self-insurance companies in Bermuda and other places to transfer profits through fictitious reinsurance contracts. The OECD's "BEPS 10th Action Plan" requires self-insured businesses to have real risk transfer. ###3. International anti-tax avoidance measures 1. **Three-tier system of transfer pricing documents** (Country reports, main documents, local documents) Require companies to prove that related-party transactions comply with the principle of independent transactions, and have been implemented in more than 100 countries since 2016. 2. **Controlled Foreign Company (CFC) Rules** For the undistributed profits of offshore companies, more than 40 countries have implemented CFC tax systems in their laws. For example, the GILTI tax system in the United States imposes a minimum tax of 10.5% on income from overseas intangible assets. 3. **Digital Service Tax (DST)** 30 countries, including Britain, France and Italy, have legislated to impose a temporary tax of 2-7% on the income of digital companies as a transitional measure to deal with profit transfer. 4. **Global Minimum tax Agreement** The OECD inclusive framework signed by 136 jurisdictions stipulates that from 2024, the 15% global minimum tax rate (GloBE rule) will be implemented for companies with a revenue of more than 750 million euros. ###4. Compliance recommendations 1. Conduct regular preparation of transfer pricing documents and filing of information during the same period 2. Use advance pricing arrangements (APAS) to reduce audit risks 3. Pay attention to the dynamics of base erosion and profit shifting (BEPS) 4. Establish an internal control system for tax risks Note: According to data from the World Bank, the annual global tax losses due to cross-border tax avoidance exceed US5500 billion. Enterprises should strictly abide by the tax law of the place where they operate, and any tax arrangements must be based on actual economic activities. It is recommended to consult a professional with international tax qualifications for compliance planning.