A company A has its headquarters in the coastal special economic zone and enjoys the preferential income tax rate of 15%. The production of their products is completed by Company A's Company B located in China, and Company B applies the proportional tax rate of 33%. Company A buys products1000000 pieces from Company B every year and sells them abroad. The purchase price is 6.8 yuan for each piece, and the price is 8.3 yuan for each piece. The production cost of this product is 5.2 yuan/piece, so the profits and tax payable of these two companies are already very obvious:

A company's annual profit = (8.3-6.8) ×100 =150 (ten thousand yuan)

Income tax payable by Company A =150×15% = 22.5 (ten thousand yuan)

The annual profit of Company B = (6.8-5.2) ×100 =160 (ten thousand yuan).

Income tax payable by Company B =160× 33% = 52.8 (ten thousand yuan)

Total income tax paid by Company A and Company B = 22.5+52.8 = 75.3 (ten thousand yuan).

For the purpose of tax avoidance, part of the profits of Company B with high tax rate can be transferred to Company A.. We already know that the unit price of products purchased by Company A from Company B is 6 yuan, but they are still sold in 8.3 yuan, so:

A company's annual profit = (8.3-6.0) ×100 = 230 (ten thousand yuan)

Income tax payable by Company A = 230×15% = 34.5 (ten thousand yuan)

Company B's annual profit = (6.0-5.2) ×100 = 80 (ten thousand yuan)

Income tax payable by Company B = 80× 33% = 26.4 (ten thousand yuan)

Income tax paid by Company A and Company B * * * = 34.5+26.4 = 60.9 (ten thousand yuan)

Before and after the profit transfer of the two companies A and B, the total annual profit of the two companies is:150+160 = 3100000 yuan; The total profit after profit transfer is: 230+80 = 310 (ten thousand yuan). Before and after the profit transfer, the total profits of the two companies were equal, but after the transfer pricing was adopted, the income tax payable by the two companies decreased by 75.3-60.9 =144,000 yuan. As long as enterprises can find two regions with larger tax rates and conduct trade and cooperation between the two enterprises, the greater the amount of trade, the more tax can be saved.