(1) By lowering the price of sports shoes sold by China to the Japanese parent company, the Japanese side transferred the profits of the joint venture to the Japanese parent company, which did not conform to the related party transaction pricing rules and reduced the tax revenue of China. Therefore, the China Municipal Government believes that the pricing allocation of this transaction is unreasonable.

(2) The Enterprise Income Tax Law of People's Republic of China (PRC) and the Implementation Regulations of the Enterprise Income Tax Law of People's Republic of China (PRC) were officially implemented on June 5438+ 10/day, 2008. The new chapter on tax adjustment of tax law stipulates anti-tax avoidance measures such as tax treatment of related party transactions from the perspective of substantive law.

(3) If the related party transactions are priced at the market price, then:

[31.5/70%-31.5] * 36,000 = 486,000 yuan.

Increase corporate income tax of China government: 486,000 * 33% =160,380 yuan.

Assuming that all after-tax profits are distributed by shares, the withholding tax on dividends remitted to Japan will be increased: (486 000-160 380) * 50% *10% =16 281yuan.

After adjusting the selling price of related party transactions, the China Municipal Government can increase the tax:160380+16281=17661yuan.