The urgency of the research subject Over 30 years of renovation with reforms to open the integration with the world economy, Vietnam has made progress in attracting international investment capital, especially FDI inflows. Although undergoing some ups and downs, in general, FDI inflows to Vietnam have continuously increased in both quantity and quality. In particular, FDI into Vietnam is carried out mainly by multinational companies (MNCs) in the world. Investments from multinational companies are a solution to the problem of how to improve the level of science and technology, the level of economic management and employment for workers.
It can be affirmed that FDI is an important source of capital for Vietnam's economy, a driving force and creating dynamic and competitive for our country market. In addition to the positive aspects mentioned above, this form of investment is also showing a worrying phenomenon: many FDI enterprises - branches of multinational companies in Vietnam declare long-term losses in many the year that makes the budget loss a huge tax, at the same time creates unfair competition with domestic enterprises, most likely leading to market stagnation, bad impact on the management mechanism financial management in the FDI sector as well as the goal of attracting this capital flow of the Government. Facing the above situations, the issue of price transfer in FDI enterprises has been mentioned a lot in recent times. According to the statistics, about 70% of FDI enterprises in Ho Chi Minh City declared long-term losses; across the country this figure is over 50%; despite the fact that development is very good and growing at a high rate.
The situation of "fake losses, real profits"; The fact that more and more large multinational corporation‟s subsidiaries after many years of operation in Vietnam do not incur payable corporate income tax has posed a great challenge for economic managers; at the same time, putting pressure on genuine businesses. Facing this situation, the Government, which is directly the Ministry of Finance, has taken many measures, most notably building and implementing guidelines for determining market prices in business transactions between related parties; implement the mechanism of pre-agreement on prices. At the same time, the relevant authorities at the central and local levels have also embarked on a series of specific and positive solutions. However, the situation of "losses" continues and tends to increase; at the same time, the issue of price transfer control is also facing many challenges.
Stemming from the above situation as well as through my research and to serve the professional work, I have selected the topic "Controlling transfer pricing activities in multinational company‟s branches in Vietnam" as the subject of my graduation thesis. Objectives of the research The overall objective is to propose solutions to improve the effectiveness of transfer pricing control in multinational corporation branches in Vietnam. Specific objective: Clarify theoretical issues about multinational companies and transfer pricing activities. Complete the theoretical framework for controlling transfer pricing activities on the basis of studying guidelines on transfer pricing control by national organizations, countries around the world and in the region.
Analyzing the current situation of transfer pricing in Vietnam, indicating the transfer pricing methods implemented by MNCs branches in Vietnam. Analyzing the current status of transfer pricing activities control in Vietnam from many angles: from completing the law on price transfer control to implementing measures of professional nature; specify the achievements and limitations of this work. Proposing solutions derived from the practical situation, having a basis to effectively control the transfer pricing activities of multinational company branches in Vietnam. Research methods Student choose dialectical materialism and historical materialism based on objective phenomena and socio-economic rules.
At the same time, student use a combination of research methods to achieve research objectives. Specifically: a) Methods of collecting and processing information The method of collecting and processing information is used by students to collect primary and secondary documents. These are the financial statements of several multinational companies in Vietnam; reports on inspection results of multinational company branches of the General Department of Taxation and Tax Departments in some localities; some conclusions of inspection of violations of tax obligations in general, suspicion of price transfer in particular of Inspectorate of the Ministry of Finance, State Audit; relevant legal documents, reports, projects and programs of the Ministry of Finance, the Ministry of Planning and Investment, the General Statistics Office, the General Department of Taxation and tax authorities in some localities. Along with that are projects, scientific research projects at many levels, the master's thesis in economics, scientific articles in country and abroad related to multinational companies, multinational corporate finance and transfer pricing.
Students have processed the information from these documents to achieve the following objectives: To systematize the research results before the graduate thesis, find out the problems and problems, exist as well as point out the research gap that the graduate thesis needs to seek, thereby finding new points of the problem. Finding and collecting scientific bases as well as data from reliable sources serve as an objective basis for the formulation of arguments, demonstrations on both theoretical and practical perspectives. Present conclusions and research results of the thesis according to my own approach. b) Analysis method The analytical method is used to analyze the data related to the problems of buying and selling financial and non-financial goods, products and services (internal transfer activities) of MNC's branches in Vietnam with the parent company as well as with the related parties.
In addition, the method is used in analyzing the forms and processes that a multinational company branch implements to carry out transfer pricing activities. The thesis has analyzed some data to see the impact of transfer pricing in multinational company branches in Vietnam, focusing on eroding the tax base as well as causing the situation of loss of state budget revenue. However, transfer pricing is a very sensitive issue, in addition to some publicly available information and data, many of the documents provided by the authorities are internal documents and have not been published, Some documents contain information that is considered as an asset owned by an enterprise with a limit of users, Some documents have a security nature at the present time, so in the process of using, students are asked not to publicly make clear the source and name of the business and the name of the multinational companies or the parties have an related relationship. But I can confirm that the documents have clear origin, high reliability and are provided by competent authorities in accordance with the process; at the same time, I used and faithfully cited in the thesis.
c) Comparison method This method is used to compare the provisions of the legal system of Vietnam with the provisions of some international organizations such as the United Nations or OECD as well as some other countries on the direct investment policy, tax policy, internal transfer pricing methods as well as other related issues. At the same time, the comparative method is also used to compare and analyze the changes in regulations on price transfer control in Vietnam through periods and analyzes to show the pros and cons of each regulation. d) Case study analysis method Case study is a qualitative research method that is very suitable to my thesis as well as to the nature of the research data. This method is used by me to analyze in some cases, typical cases of transfer pricing at multinational companies' branches in Vietnam as well as typical cases of controlling transfer pricing of some countries.
This method helps the thesis answer the question of how price transfer forms are taking place at multinational companies' branches in Vietnam as well as in the world; ways in which advanced countries as well as countries with conditions similar to Vietnam respond to transfer pricing activities. At the same time, the case study method also allows me to select typical cases, typical transfer pricing questions as evidence for transfer pricing in multinational company branches in Vietnam. e) Secondary data collection method Due to the nature of the data and research materials, I could not directly investigate the actual data but use the survey results (secondary data) of some authorities as well as specialist research teams. The results of these surveys are used appropriately to increase the reliability of the thesis points.
Specifically, the thesis has used the research results: The survey results of the General Department of Taxation; Survey results of the Tax Department in some localities; Survey results of expert group from City University of Economics. Ho Chi Minh, Statistical survey results of the General Statistics Office. f) Method of systematization and synthesis Systemized and generalized methods are used to link research points into a unified whole to express the most complete and profound issues of the thesis. The method of systematization and synthesis also helps me answer the research questions logically and in accordance with the law, with the nature of the problem.
Research objects and research scope The thesis deals with many issues, from general theory of multinational companies and price transfer activities to controlling transfer pricing activities in multinational company branches in Vietnam. The object of the thesis is to control transfer pricing activities in multinational companies' branches in Vietnam. Research scope: In term of space: Currently, 63/63 provinces and cities directly under the Central Government of Vietnam have FDI enterprises. The dissertation has studied and analyzed transfer pricing nationwide, with a focus on a number of key provinces and cities on FDI attraction as well as reports on transfer pricing and big, complex transfer pricing suspects.
In terms of time: the thesis studies transfer pricing and price transfer control in the period since Vietnam opened its doors to FDI up to the present time, due to the nature of research data. Research should focus mainly on the period from 2008 to 2018. Scientific and practical significance of the thesis In term of theoretically: The thesis contributes additionally, develops the theoretical framework of transfer pricing and control of transfer pricing activities. These theoretical contributions continue to reinforce the research results of previous scientists in clarifying the nature of transfer pricing, subjective and objective causes to promote transfer pricing activities of the genera multinational company branch; the impact of transfer pricing on many entities in the current open economy.
Along with that, the thesis has contributed a number of theoretical issues about controlling transfer pricing in the new situation. The theoretical framework that the thesis adds and develops can serve as a rationale for the research after the dissertation and use it as a useful document to help managers have a more comprehensive view of transfer pricing, with basis to build effective transfer control solutions. In terms of practice: The thesis has clarified the reality of transfer pricing in some countries in the world as well as in Vietnam; show how countries in the world as well as Vietnam are applying in price transfer control; assessing advantages and disadvantages of price transfer control in Vietnam over the past time. On that basis, I developed proposals to improve the effectiveness and efficiency of price transfer control.
The proposals of the thesis have great significance in terms of supplementing and completing policies as well as implementing policies. The thesis can be consulted by relevant agencies in the process of implementing price transfer control at their agencies, units, ministries and branches. Structure of the thesis In addition to the introduction, conclusion and list of references, the thesis consists of 4 chapters: Chapter 1: Overview of the research topic Chapter 2: The theory of transfer pricing and control of transfer pricing activities in multinational company‟s branches Chapter 3: Actual situation of controlling transfer pricing of multinational company branches in Vietnam Chapter 4: Solutions to control transfer pricing activities of multinational company branches in Vietnam CHAPTER 1 OVERVIEW OF THE RESEARCH SITUATION 1. RESEARCHES ABOUT FINANCIAL ISSUES OF MNCs 1.