In international trade, transfer pricing refers to the price set by a multinational corporation when trading goods, services or intangible assets between its affiliated companies. This mechanism can be used to achieve tax optimization. Here are some strategies for using transfer pricing to optimize tax: 1. **Reasonable pricing strategy**: Ensure that the pricing of internal transactions is consistent with the market price (Arm's Length Principle), that is, it is comparable to the price between unrelated parties, which can reduce the audit risk of the tax authorities. 2. **Choose low-tax countries**: By transferring high value-added businesses or intellectual property rights to affiliated companies in low-tax countries, the overall tax burden can be reduced. For example, transfer R&D or production to countries with lower tax rates. 3. **Adjust profit distribution structure**: Adjust the profit distribution of various branches of multinational corporations according to the tax rates of different countries. For example, by placing production activities or sales activities in high-tax countries, profits can be transferred to low-tax countries, thereby achieving tax optimization. 4. **Use of intangible assets**: By licensing the use of intangible assets (such as trademarks, patents, etc.) and collecting royalties, the tax base can be reduced in high-tax countries, thereby transferring profits to low-tax countries. 5. **Multi-country tax treaties**: Use tax treaties between different countries to avoid double taxation and minimize the overall tax burden. 6. **Compliance and transparency**: Ensure compliance with tax laws and regulations of various countries, maintain good financial records and transfer pricing documents to reduce the risk of tax audits. 7. **Market conditions analysis**: When formulating transfer pricing strategies, analyze market conditions, competition and economic environment to ensure the rationality and legality of pricing. It should be noted that countries have very strict supervision on price transfers, and blindly pursuing tax optimization may lead to legal risks. Therefore, it is recommended to seek the advice of professional tax advisors when performing these operations to ensure compliance and reduce potential risks.