China tax newsletters
Mazars’ comments on tax issues in the People’s Republic of China.
May 2017 - SAT Integrating BEPS Action Plans 8 to 10 and Action Plan 14
On 17 March 2017, the State Administration of Taxation (“SAT”) released its long-awaited Bulletin on Special Tax Investigations, Adjustments and Mutual Agreement Procedures (“Bulletin 6”), thus largely completing the revision of the transfer pricing specific clauses of the old Circular 2 concerning Special Tax Adjustments.
March 2017-Chinese Government Authorized Local Governments To Formulate And Issue Preferential Policies On Business And Investment
In early January 2017, the State Council announced “Circular of State Council on Several Measures concerning the Expansion of Opening-up and the Active Use of Foreign Capital”, so-called “ Several Measures” and effected on 12 January 2017. The local governments are allowed to, within the scope of their statutory authority and under the approval from the Central Government, establish and distribute preferential policies on business and investment attraction, support those projects that will make big contributions to employment, economic development, and technological innovation, reduce investment and opening costs of enterprises.
July 2016 SAT Issued new rules on reporting of related party transactions and contemporaneous documentation
On 29 June 2016, the State Administration of Taxation (SAT) issued the Public Notice Regarding Refining the Reporting of Related Party Transactions and Administration of Transfer Pricing Documentation (SAT Public Notice [2016] No. 42, hereinafter referred to as “Bulletin 42”). Bulletin 42 provides new transfer pricing compliance requirements in China, including Annual Reporting Forms for Related Party Transaction (“RPT Forms”), Country- by-Country Reporting (“CbCR”), and Transfer Pricing Documentation (“TPD”).
April 2015 - Mainland and the HK SAR signed the fourth protocol to the arrangement for avoidance of double taxation
On 1 April 2015, the Secretary for Financial Services and the Treasury, Professor K C Chan, signed the Fourth Protocol to the Arrangement for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income with the Mainland (“China-HK Tax Treaty”) with the Deputy Commissioner of the State Administration of Taxation, Mr. Zhang Zhiyong, in Hong Kong.
April 2015 - China Making further scrutiny on payments to overseas related parties
As reported in our September 2014 Newsletter, the Notice of Anti-Avoidance Examination on Significant Outbound Payments (Shuizongbanfa [2014] No. 146) (“Circular 146”) was issued by the State Administration of Taxation (“SAT”) in July 2014 to instruct all of its subordinate tax bureaus to review those enterprises paying significant amount of service fees or royalties to overseas related parties during 2004 to 2013.
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