(Luận văn tốt nghiệp) controlling transfer pricing activities in multinational companys branches in vietnam

h INTRODUCTION 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 h 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 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 h 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, h 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 h 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 h 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; h 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 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 h CHAPTER OVERVIEW OF THE RESEARCH SITUATION 1.1 RESEARCHES ABOUT FINANCIAL ISSUES OF MNCs 1.1.1 Foreign researches 1.1.1.1 Textbooks, monographs - The book "MNCs and Modern Financial Management" by Chaurasia, Harish, Publisher Rajat Publications (2008) The book contains 15 chapters, which cover many general issues about multinational companies: concepts and views about MNCs; formation and development; multinational companies; multinational companies with international trade development; financial management of multinational companies; the role of multinational companies with international direct investment activities [76] - Book "Multinational Corporations in Political Environments: Ethics, Values and Strategies" by Halley, Nxb World Scientific (2001) The book is 293 pages of the author's research on the issue of multinational companies in the political h environment, with content focusing on business ethics, benefits and corporate strategy The book for readers answers why many multinational companies in the world receive great incentives from national governments; Many economic competition activities have the nature and color of political factors and that the governments of many countries can hardly punish multinational companies from other countries by political factors Part IV of the book is my reality survey in many aspects, from data collection, analysis and making judgments and assessments on research issues [85] - Shapiro, Alan C (1999) with the book "Multinational Financial Management", 6th edition, Nxb John Wiley & Sons This work is considered by many economic experts as a classic work on international financial management, used as a monograph for many major universities in Vietnam The book addresses international financial management issues such as exchange rate management and exchange rate risk, derivative management, cash flow management, and international investment management that Subjects are multinational companies [105] - A curriculum that is highly appreciated by many international financial experts is the "International Financial Management", the 9th edition by Jeff Madura (2008), Florida Atlantic University This book is used by many major universities in the world as a compulsory curriculum or reference in learning, economic research, and finance The book focuses on financial management issues; in which many contents refer to international investment management, which is multinational companies The author deeply analyzes the content of foreign direct investment; the nature of FDI as well as mentioning some of the ways that multinational companies carry out to redeem profits; rationalize costs [88] - "International Corporate Finance" Jacque, Laurent L, Nxb Wiley (2014) The book mentions the use of derivative instruments, particularly going into the use of currency derivatives in governance and increasing the cash flow value of multinational companies worldwide The study also provides some good examples of financial management of multinational companies on cash flow management, h which are mainly foreign exchange and corporate bond management [87] 1.1.1.2 Research papers - Research by Kari Levitt about "Silent Surrender: The Multinational Corporation in Canada" (2002) This can be considered a typical study of multinational companies in a typical G7 country The study focuses on major issues, which emphasize the importance and influence of MNCs in the economic development of each country; decision-making issues in global corporate governance; issues of financial information security This can also be considered as a document showing the nature of multinational companies: securing internal information, especially financial information [89] - Author Nick Robins with the study "Corporation That Changed the World: How the East India Company Shaped the Modern Multinational", Pluto Press Publishing (2012) The study refers to the East India company - the company considered by many economic historians to be the first MNCs in the world The author studies the formation, development of this company and the imprints it Z Tea 1.500.000 630.000 1,381 production X Tea 1.200.000 500.000 1,400 production Y Tea 1.300.000 550.000 1,364 production From there determine the second quartile (the most appropriate adjustment): 1,450 (Determine according to QUARTILE function (gross profit margin on the 1st COGS: gross profit ratio on the 8.2th COGS) - Use this second quartile to adjust the selling price of DKJ products: Price of B1 product: 30,000 x (1 + 1,450) = 73,500 VND Product price B2: 35,000 x (1 + 1,450) = VND 85,750 Product price B3: 40,000 x (1 + 1,450) = VND 98,000 Since then determine the market price of the products according to the appropriate quartile value, determine revenue, cost and adjustment calculations compared to the previous: h 138 Apply cost plus method Revenue BEFORE The most appropriate gross profit on ADJUSTING according to Product the most appropriate COGS ratio = 1,450 Selling Total expense COGS expenses (mil VND) (mil Administrative VND) value Revenue AFTER VND) ADJUSTING according to the h (thousand expense (mil most appropriate value _ Gross profit VND) / COGS margin Increase / Decrease compared to Revenue BEFORE ADJUSTING (VND thousand) B1 320.000 B2 456.000 300.000 735.000,00 230% 420.000 1.029.000,00 226% 139 B3 Total 1.290.000 2.066.000 1.200.000 3.220.000 1.920.000 400.000 h 140 2.940.000,00 228% 900.000 4.704.000,00 228% From the table of above calculations, this DKJ enterprise has implemented many ways to make the selling price and cost of enterprises become unreasonable compared to similar enterprises There is enough basis to conclude that DKJ Company has a transfer pricing operation to be able to conduct a comprehensive inspection 4.3.4 Control transfer pricing through improving advertising costs Advertising costs are a reasonable cost but relatively difficult to identify, so it is applied by many enterprises to increase the cost of the business, thereby reducing the actual profit level Before January 1, 2015, according to the provisions of Point m, Clause 2, Article of Law No 32/2013 / QH13, there are regulations on advertising and marketing expenses is not deducted when calculating CIT as follows: "Spending on advertising, marketing, brokerage commissions, receptions, festivals, conferences, marketing support, supporting costs directly related to production and business activities exceeds 15% of the total deductible expenses " h However, from January 1, 2015, according to the provisions of Clause 4, Article of Law No 71/2014 / QH13 effective from January 1, 2015, to amend and supplement a number of Articles of Law No 32 / 2013 / QH13 stipulates the abolishment of Point m Clause Article above Thus, from 2015, the regulation on limit ceiling of many types of expenses is no longer available This is considered a step of tax administration reform of Vietnam in accordance with international practices of reasonable costs calculated But this also poses challenges for state management agencies in controlling transfer pricing through improving advertising costs Some of my proposed solutions to this problem are as follows:  The abolition of regulations on ceiling advertising, marketing, brokerage commissions, reception is completely accurate and consistent with international practices, but the level of expenditures and expenses need to be ensured compliance with revenue 141  Consider building a reasonable rate of expenses on revenue; It is possible to use amplitude and revenue levels as a basis to determine the rate of each reasonable cost  Refer to the advertising cost / revenue ratio of sectors / sectors around the globe, so that regulations can be developed in accordance with Vietnamese practices In my opinion, it is not recommended to set a common ceiling for all sectors / sectors, but should instead consider setting up an appropriate rate frame for each industry / sector Every year, the Global Marketing Report (posted on Adage.com) always has statistics of advertising / sales expenses over the years Basically, this rate has not changed too much in every - 10 years (except for the years when the world economy has strong fluctuations or major problems affecting one or several specific industries) can); therefore, this is a very useful reference channel for developing Vietnamese regulations This data sheet is summarized in Appendix of the Dissertation 4.3.5 Control transfer pricing through lending between related parties h The object for which the transfer of prices is made through lending between the related parties concerned is the financial cost of paying the loan interest In order to control this form of transfer, it is necessary to have many sanctions, including the issue of revising the current regulations of Vietnam Specifically:  Develop sanctions that regulate the ceiling interest rate on foreign currency loans for foreign businesses operating in the territory of Vietnam and borrowing from foreign banks or credit institutions Avoiding the occurrence of many enterprises borrowing foreign loans at very high interest rates, much higher than the foreign currency loans in the domestic market  Eliminating the financial costs of unreasonable expenses, the clarity and lack of clarity of FDI enterprises and MNCs For example, many FDI enterprises when borrowing abroad often have costs such as "fees for providing financial advisory services, arranging loans" Basically, this is a kind of reasonable and effective cost that helps businesses choose the borrowing currency, loan interest rate, loan term, loan terms and debt repayment as well as help businesses quantify risks (exchange 142 rate) in the loan process However, when this cost is too large, it is necessary to have close supervision of the state management agency, in particular here is the State Bank and the Ministry of Finance  The contractor tax issue needs to be carefully considered According to Vietnamese law, suppose that Party A signs a construction contract with Party B, then Party B is selected between two forms of tax payment: paying corporate income tax at the percentage of profit or closing Contractor tax according to the percentage of revenue after subtracting the revenue of subcontractors The fact that most parties B choose to pay taxes in the second way, and the tax payable is usually very low compared to the first tax payment  Develop regulations on "thin capital" A company is usually funded through owner's equity and liabilities "Thin capital" refers to the situation where the company mobilizes capital with a relatively high liabilities ratio compared to equity Companies that are thin are sometimes called companies with high leverage In recent years, many countries worry that enterprises use loans rather than use equity h in the capital structure of enterprises to reduce the tax liability from being deducted from interest expenses before determine taxable income This is very easy for MNCs through internal capital transfers, whereby branches in one country can borrow from a parent company or another branch Therefore, Vietnam needs to consider building regulations on the interest that businesses must pay for loans of parties that have a relationship that exceeds a certain ratio, it will not be considered as a deductible expense when determine taxable income This ratio from the experience of many countries shows that: most countries stipulate that corporate loans on equity exceed 3: (except for a financial enterprise, China stipulates 5: Korea is 6: 1) it is considered to be thin and the interest paid in excess of this rate is not considered to be deductible when determining taxable income Some other countries have lower rates, such as Venezuela 1: 1; Canada or China is 2: 1; France and the United States are 1.5: 143 Table 4.4 Regulations on the ratio of thin capital of some countries in the world No Country Specifying the ratio of liabilities / equity allowed to be deducted 1.5 : 1 The USA France Venezuela 1:1 Netherlands 3:1 Romanian 3:1 Australia 3:1 New Zealand 3:1 Swiss 6:1 China 2:1 1.5 : (Source: I synthesize from national’s regulations) h 4.3.6 Control of profit transfer pricing in Vietnam Basically, the General Department of Taxation as well as the local Tax Departments are mostly focusing on struggling with loss transfer pricing In Vietnam, there are no official conclusions about the form of profit transfer pricing of FDI enterprises However, it is still necessary to have solutions to control profit transfer pricing First, for FDI enterprises that apply for conversion to joint stock companies after a short time of operation: it is necessary to strictly control the process of valuation of enterprises, avoid capitalization of assets to move capital out of Vietnam, disturb capital flows in our country Second, for FDI enterprises that before listing on the stock market, business results suddenly become bright with high profits: It is necessary to check whether there is a phenomenon of businesses related to this enterprise to conduct transfer pricing in order to increase virtual profits for listed companies Because if that happens, it will distort the results of the financial statements of the issuer, making the value of shares increase when listed; misleading the prices of issued shares, 144 causing artificial imbalance in supply-demand in the stock market, causing market disruption Third, in the context of many countries actively attracting capital from outside with the goal of rapid and sustainable growth, Vietnam cannot be out of that trend Attracting investment capital in areas and areas with dificulties of tax and fee is still necessary However, it is necessary to avoid both domestic and foreign enterprises to transfer profits to newly established businesses to enjoy such incentives Doing this requires strict control over the issue of using costs and transferring profits of members in the same corporation, a corporation and between related parties 4.4 GROUP OF CONDITIONAL SOLUTIONS 4.4.1 Stable macroeconomics The macroeconomic impact strongly to transfer pricing and controlling transfer pricing activities, expressed in the following aspects:  Stable macroeconomics is one of the leading factors to attract foreign direct h investment from multinational companies - a problem that Vietnam will still focus on in the near future MNCs often only invest in a stable economy, because there are many business opportunities, quantify risks and almost eliminate the political risk  An unstable, highly uncertain economy, difficult to forecast the development trend with factors such as high inflation, clear tax policy is quite possible to motivate MNCs' branches to carry out transfer pricing According to research by NCS Phan Hiển Minh [27] it is concerned that macroeconomic instability motivates MNCs to implement transfer pricing procedures to quickly recover investment capital and increase profits quickly  Unstable macroeconomics creates difficulties for controlling transfer pricing Because then, the tax authorities as well as the relevant authorities will not have the necessary conditions in terms of manpower, material resources as well as technical factors to implement transfer pricing control effectively 145 Recently, the Government has implemented many synchronous solutions, especially in the context of high inflation concerns Monetary and financial policies are used flexibly, and at the same time there is a change in the economic model In fact, in the past 10 years, Vietnam has proved that these solutions have been developing effectively, contributing to stabilizing the macro economy before many changes of the world economy However, the economy always tends to be cyclical, so it is difficult for them to pass through Therefore, in my view, from now until 2022, with vision to 2030, it is still necessary to continue implementing macroeconomic stability solutions, focusing on the following solutions:  Focusing on completing a synchronous and modern market economy institution on the basis of fully complying with the rules of the market economy and deep international economic integration; in which continue to study and issue mechanisms and policies in order to improve the business environment, ensure business freedom, improve national competitiveness; focusing primarily on comprehensive reform of industry regulations, business investment with conditional h business, specialized management regulations on export and import, administrative regulations related to land, investment, construction and the environment  Ensuring major balances of the economy, including effective management of monetary policies, fiscal policies and other policies to ensure macroeconomic stability, controlling inflation at a reasonable level, maintain the major balances of the economy; ensuring national financial security  Implementing a proactive, flexible and tight monetary policy; operating interest rates, exchange rates in accordance with market principles, macroeconomic developments, currencies; continue to deploy synchronously solutions to effectively manage the foreign exchange market in accordance with the objective of antidollarization and goldization in the economy of the Government Handling to reduce bad debts  Renovating management policies to enhance control and improve the efficiency of using government loans, restructuring public debt, gradually increasing the re-lending rate, gradually reducing the allocation and guarantee rates of the Government Strictly control of local government loans and investment funds 146 originating from the budget; ensuring safety limits on public debt, government debt, and national debt under the Resolution of the National Assembly  Implementing the principle of price management under market mechanism, accelerating the implementation of market price mechanism with state regulation on the prices of important public services 4.4.2 Stable and improve the value of Vietnamese currency The devaluation of the Vietnamese currency against other foreign currencies is one of the top concerns of foreign investors when investing in Vietnam because it directly affects the preservation of investment capital and actual profits earned by investors The depreciation of the national currency is a reason for transfer pricing behavior of foreign investors Recently, the Government has been implementing many solutions, especially the move to abolish the "2 exchange rates mechanism" (interbank exchange rate and black market exchange rate) in the transaction between VND and USD Along with that is the increase in foreign currency reserves so that when necessary can participate in regulating the market in order to h avoid the case of abnormal fluctuations in exchange rates, affecting import and export activities In addition to some solutions to stabilize the value of the Vietnamese currency of the Government has been presented above, I would like to contribute some additional comments as follows:  For open market operations tools: Increasing the accumulation of foreign currency, foreign currency reserves must increase in proportion to the growth rate of import turnover; In case of necessity, the Government may issue an import credit guarantee for essential goods in service of the economy and industrialization and modernization Step by step building mechanisms, legal frameworks and operating environment in order to bring the open-market operation tool up to its right position in adjusting the exchange rate Besides, it is necessary to select a feasible plan for building a major foreign currency reserve structure for the current strong currencies (USD, Yen, Euro ) 147  Use interest rate tools more effectively Rediscount interest rates are considered a tool to adjust exchange rates Solutions to gradually increase the strength of the rediscount interest rate tool in intervention activities, adjusting exchange rates will also be the path of capital account liberalization, first of all for short-term capital transactions, indirect investment and it is also the step by step to make Vietnam dong become a convertible currency  Operating monetary policy on the principle of prudence, flexibility and efficiency through modern monetary policy tools and advanced technology Implementing the interest rate policy in line with the market mechanism, exchange rate policy according to the market with flexible regulation with appropriate amplitude  Renovating foreign exchange management policies, developing the financial market, constantly focusing on improving the domestic market opening tools  Limit and proceed to end dollarization  Continue to promote the control of prices, inflation and state budget h overspending Stable purchasing power of money 148 CONCLUSION OF CHAPTER Transfer pricing is a complex issue not only for Vietnam but also for most countries in the world What Vietnam lacks is the experience in managing and controlling this phenomenon, so Vietnam's management agencies need to constantly learn and regularly update the situation in the region and the world, from that builds for the country the most effective management methods Vietnam is a developing country; Economic management experience is still limited, legal corridors are not complete, so it is necessary to actively build and improve the legal system to gradually improve the efficiency of economic management in general and controlling transfer pricing in particular In addition, in controlling transfer prices, it is necessary to emphasize the coordination of relevant agencies such as tax authorities, customs offices, banks, auditors In order to best implement economic policies, at the same time control the highest level of internal transactions in MNCs At the same time, it is necessary to accelerate the implementation of Advance Pricing Agreement (APA) - a solution h currently being considered by many countries around the world as an effective tool to control transfer pricing Transfer pricing thinking needs to shift from "antitransfer pricing" to "control transfer pricing" and create conditions for enterprises to comply with the law, while helping relevant agencies to improve management efficiency and reduce administrative costs 149 CONCLUSIONS After more than 30 years of renovation, there is no denying the great contribution of FDI inflows to the process of promoting economic and social development Through FDI channels, Vietnam has received new technologies, absorbing advanced economic management experiences; People can use the goods with higher quality In addition to those positives, an issue that economic managers need to seriously consider and soon find a control solution is that transfer pricing activities are taking place more and more seriously in MNCs' branches in the world Transfer pricing is a sophisticated financial and economic activity used by MNCs to maximize their profits Transfer pricing causes adverse impacts on the economic development of the investment recipient country, such as shifting investment structure, tax loss, creating a competitive imbalance, increasing the likelihood of economic turmoil Transfer pricing is technically complicated, carried out by MNCs with advanced management skills, so controlling this activity is a difficult issue for all countries h To be able to control at the highest level requires close coordination between relevant agencies in a country and between countries For Vietnam, 30 years of innovation also recorded transfer pricing cases and a series of transfer pricing questions As a country taking important steps in the process of global economic integration, Vietnam needs to regularly monitor and update the transfer pricing and preventive measures of advanced countries in the world, at the same time, it is proactive in studying the actual situation of its country, thereby giving reasonable policies for controlling transfer pricing From the perspective of being an independent scientific research project, my thesis has achieved the following results:  Affirming transfer pricing is a subjective activity of multinational companies' branches, appearing when international trade develops to a certain level and tends to increase when countries proceed to open integration and attract foreign investment 150  The thesis has identified ways of implementing transfer pricing of MNCs, thereby highlighting the negative impact of this activity on reducing tax obligations to the State, changing the structure of commercial transactions, distorting the cost of capital resulting in deviation in benefit distribution, creating the ability to occupy, gain market share as well as take over partners with the lowest cost  The thesis has sketched a picture of the transfer pricing situation in Vietnam as well as the situation of controlling transfer pricing over the past time, deeply analyzed some specific cases, pointed out positive results as well as limitations of controlling of transfer pricing , thereby proposing valuable solutions both in policy and practice Transfer pricing and controlling of transfer pricing are complex theoretical and practical issues Certainly, my thesis, despite the effort, still cannot avoid of inadequacies I look forward to receiving comments from scientists to further improve this research work, to bring the work into practice./ h 151 h