First of all, this sentence means: in the process of pre-pricing, the quarterback method is used to determine the price or profit level. Specific explanation: If the actual operating results of an enterprise in that year are outside the quartile range, the tax authorities can adjust the actual operating results to the median of the quartile range. If the weighted average value of the annual operating results of an enterprise is lower than the median value of the interval and has not been adjusted to the median value after the implementation of the advance pricing arrangement expires, the tax authorities will no longer accept its application for renewal.

Quartile method has more reference significance for average and median. Arrange the data from small to large, and divide the data into four parts with the values of three positions. The three dividing points are: 25%, 50% and 75%. Combining the maximum value with the minimum value, drawing a box diagram can more intuitively see the data characteristics, especially the abnormal values.

Requirements for advance pricing arrangement:

Independent execution

The tax authorities and enterprises may suspend or terminate the negotiation after the formal negotiation of the advance pricing arrangement and before the signing of the advance pricing arrangement. If bilateral or multilateral advance pricing arrangements are involved, the negotiations may be suspended or terminated through consultation by the tax authorities of both contracting parties. If the negotiation is terminated, both parties shall return all the information provided to each other during the negotiation.

Obligation of confidentiality

Both parties shall keep confidential all information obtained or obtained by tax authorities and enterprises in the whole process of preparatory talks, formal talks, review and analysis of advance pricing arrangements. The tax authorities and enterprises shall make a written record of the contents of each meeting, and at the same time specify the quantity and contents of the information provided to the other party during each meeting, which shall be signed or sealed by the main negotiators of both parties.