Organic and inorganic characteristics including bacterial cell number, enzyme activity, nutrients, and heavy metals have been monitored in twelve acrylic experimental tanks for two weeks to estimate and compare self-purification capacities in two Korean wet-land environments, tidal flat and rice field, which are possibly different with the environments in other countries because of their own climatic conditions. FW tanks, filled with rice field soils and fresh water, consist of FW1&2 (with paddy), FW3&4 (without paddy), and FW5&6 (newly reclaimed, without paddy). SW tanks, filled with tidal flat sediments and salt water, are SW1&2 (with anoxic silty mud), SW3&4 (anoxic mud), and SW5&6 (suboxic mud). Contaminated solution, which is formulated with the salts of Cu, Cd, As, Cr, Pb, Hg, and glucose+glutamic acid, was spiked into the supernatent waters in the tanks. Nitrate concentrations in supernatent waters as well as bacterial cell numbers and enzyme activities of soils in the FW tanks (except FW5&6) are clearly higher than those in the SW tanks. Phosphate concentrations in the SW1 tank increase highly with time compared to those in the other SW tanks. Removal rates of Cu, Cd, and As in supematent waters of the FW5&6 tanks are most slow in the FW tanks, while the rates in SW1&2 are most fast in the SW tanks. The rate for Pb in the SW1&2 tanks is most fast in the SW tanks, and the rate for Hg in the FW5&6 tanks is most slow in the FW tanks. Cr concentrations decrease generally with time in the FW tanks. In the SW tanks, however, the Cr concentrations decrease rapidly at first, then increase, and then remain nearly constant. These results imply that labile organic materials are depleted in the FW5&6 tanks compared to the FW1&2 and FW3&4 tanks. Removal of Cu, Cd, As from the supernatent waters as well as slow removal rates of the elements (including Hg) are likely due to the combining of the elements with organic ligands on the suspended particles and subsequent removal to the bottom sediments. Fast removal rates of the metal ions (Cu, Cd, As) and rapid increase of phosphate concentrations in the SW1&2 tanks are possibly due to the relatively porous anoxic sediments in the SW1&2 tanks compared to those in the SW3&4 tanks, efficient supply of phosphate and hydrogen sulfide ions in pore wates to the upper water body, complexing of the metal ions with the sulfide ions, and subsequent removal to the bottom sediments. Organic materials on the particles and sulfide ions from the pore waters are the major factors constraining the behaviors of organic/inorganic elements in the supernatent waters of the experimental tanks. This study needs more consideration on more diverse organic and inorganic elements and experimental conditions such as tidal action, temperature variation, activities of benthic animals, etc.
With the continued globalization of world markets, transfer pricing has become one of the dominant sources of controversy in international taxation. Transfer pricing is the process by which a multinational corporation calculates a price for goods and services that are transferred to affiliated entities. Consider a Korean electronic enterprise that buys supplies from its own subsidiary located in China. How much the Korean parent company pays its subsidiary will determine how much profit the Chinese unit reports in local taxes. If the parent company pays above normal market prices, it may appear to have a poor profit, even if the group as a whole shows a respectable profit margin. In this way, transfer prices impact the taxable income reported in each country in which the multinational enterprise operates. It's importance lies in that around 60% of international trade involves transactions between two related parts of multinationals, according to the OECD. Multinational enterprises (hereafter MEs) exert much effort into utilizing organizational advantages to make global investments. MEs wish to minimize their tax burden. So MEs spend a fortune on economists and accountants to justify transfer prices that suit their tax needs. On the contrary, local governments are not prepared to cope with MEs' powerful financial instruments. Tax authorities in each country wish to ensure that the tax base of any ME is divided fairly. Thus, both tax authorities and MEs have a vested interest in the way in which a transfer price is determined, and this is why MEs' international transfer prices are at the center of disputes concerned with taxation. Transfer pricing issues and practices are sometimes difficult to control for regulators because the tax administration does not have enough staffs with the knowledge and resources necessary to understand them. The authors examine transfer pricing practices to provide relevant resources useful in designing tax incentives and regulation schemes for policy makers. This study focuses on identifying the relevant business and environmental factors that could influence the international transfer pricing of MEs. In this perspective, we empirically investigate how the management perception of related variables influences their choice of international transfer pricing methods. We believe that this research is particularly useful in the design of tax policy. Because it can concentrate on a few selected factors in consideration of the limited budget of the tax administration with assistance of this research. Data is composed of questionnaire responses from foreign firms in Korea with investment balances exceeding one million dollars in the end of 2004. We mailed questionnaires to 861 managers in charge of the accounting departments of each company, resulting in 121 valid responses. Seventy six percent of the sample firms are classified as small and medium sized enterprises with assets below 100 billion Korean won. Reviewing transfer pricing methods, cost-based transfer pricing is most popular showing that 60 firms have adopted it. The market-based method is used by 31 firms, and 13 firms have reported the resale-pricing method. Regarding the nationalities of foreign investors, the Japanese and the Americans constitute most of the sample. Logistic regressions have been performed for statistical analysis. The dependent variable is binary in that whether the method of international transfer pricing is a market-based method or a cost-based method. This type of binary classification is founded on the belief that the market-based method is evaluated as the relatively objective way of pricing compared with the cost-based methods. Cost-based pricing is assumed to give mangers flexibility in transfer pricing decisions. Therefore, local regulatory agencies are thought to prefer market-based pricing over cost-based pricing. Independent variables are composed of eight factors such as corporate tax rate, tariffs, relations with local tax authorities, tax audit, equity ratios of local investors, volume of internal trade, sales volume, and product life cycle. The first four variables are included in the model because taxation lies in the center of transfer pricing disputes. So identifying the impact of these variables in Korean business environments is much needed. Equity ratio is included to represent the interest of local partners. Volume of internal trade was sometimes employed in previous research to check the pricing behavior of managers, so we have followed these footsteps in this paper. Product life cycle is used as a surrogate of competition in local markets. Control variables are firm size and nationality of foreign investors. Firm size is controlled using dummy variables in that whether or not the specific firm is small and medium sized. This is because some researchers report that big firms show different behaviors compared with small and medium sized firms in transfer pricing. The other control variable is also expressed in dummy variable showing if the entrepreneur is the American or not. That's because some prior studies conclude that the American management style is different in that they limit branch manger's freedom of decision. Reviewing the statistical results, we have found that managers prefer the cost-based method over the market-based method as the importance of corporate taxes and tariffs increase. This result means that managers need flexibility to lessen the tax burden when they feel taxes are important. They also prefer the cost-based method as the product life cycle matures, which means that they support subsidiaries in local market competition using cost-based transfer pricing. On the contrary, as the relationship with local tax authorities becomes more important, managers prefer the market-based method. That is because market-based pricing is a better way to maintain good relations with the tax officials. Other variables like tax audit, volume of internal transactions, sales volume, and local equity ratio have shown only insignificant influence. Additionally, we have replaced two tax variables(corporate taxes and tariffs) with the data showing top marginal tax rate and mean tariff rates of each country, and have performed another regression to find if we could get different results compared with the former one. As a consequence, we have found something different on the part of mean tariffs, that shows only an insignificant influence on the dependent variable. We guess that each company in the sample pays tariffs with a specific rate applied only for one's own company, which could be located far from mean tariff rates. Therefore we have concluded we need a more detailed data that shows the tariffs of each company if we want to check the role of this variable. Considering that the present paper has heavily relied on questionnaires, an effort to build a reliable data base is needed for enhancing the research reliability.