According to the "Announcement of the State Administration of Taxation" (State Administration of Taxation Announcement No. 6 of 2017): "Article 15 When tax authorities conduct transfer pricing investigations, they should conduct comparability analysis. Sexual analysis generally includes the following five aspects. The tax authorities can select specific analysis contents based on the circumstances of the case: (1) Characteristics of the transaction assets or services, including the physical characteristics, quality, quantity, etc. of the tangible assets; the type, transaction form, and protection of the intangible assets. The extent, term, expected returns, etc.; the nature and content of the service; the characteristics, content, risk management, etc. of the financial assets;

(2) The functions performed by the parties to the transaction, the risks assumed, and the assets used. Functions include research and development, design, procurement, processing, assembly, manufacturing, maintenance, distribution, marketing, advertising, inventory management, logistics, warehousing, financing, management, finance, accounting, legal and human resources management, etc.; risks include investment risk, research and development risks, procurement risks, production risks, market risks, management risks and financial risks, etc.; assets include tangible assets, intangible assets, financial assets, etc.;

(3) Contract terms, including transaction objects, transaction quantities, The analysis of contract terms should focus on the transaction price, payment methods and conditions, delivery conditions, after-sales service scope and conditions, agreement to provide additional services, the right to change or modify the contract content, the contract validity period, the right to terminate or renew the contract, etc. The ability and behavior to execute the contract, as well as the credibility of the contract terms signed between related parties;

(4) Economic environment, including industry overview, geographical area, market size, market level, and market share , market competition level, consumer purchasing power, substitutability of goods or services, production factor prices, transportation costs, government regulations, as well as cost savings, market premiums and other regional special factors;

(5) Business strategy, Including innovation and development, diversified operations, synergy, risk avoidance and market share strategies, etc.

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