Category: Tax

The Complexity of Transfer Pricing for Intercompany Services

Most Multinational Corporations (MNCs) charge intercompany service fees for services provided to other entities within the same company or business. In China,tax authorities regularly encounter inconsistencies in transfer pricing for intercompany services due to lack of access to necessary information...

/ December 14, 2016

Case Study: Exploring China’s New Capital Gain Tax Calculation

Hong Kong and China entered into a Double Taxation Arrangement (DTA) in 2006. The treaty’s purpose is to avoid double taxation, reduce tax evasion, improve ties between both jurisdictions by reinforcing their respective tax laws, encourage competition, and promote investment....

/ December 12, 2016

China Introduces Sweeping New Transfer Pricing Rules

China’s State Administration of Taxation (SAT) issued the Announcement on the Administration of Related-party Transactions and Contemporaneous Documentation (SAT Announcement [2016] No. 42), which introduces a three-tiered documentation framework that will replace its current transfer pricing documentation rules. The June...

/ September 19, 2016

China’s VAT reform and its implications for RO tax structure

China’s value-added tax (VAT) reform on May 1, 2016 was China’s biggest tax overhaul in 20 years. The reform changed the tax rate on representative offices’ (ROs) business activities, reducing the rate from five percent to three percent. The reduced...

/ August 10, 2016

Changing Import Tax Policies for e-Commerce in China

Exporters trying to sell to the lucrative Chinese market, with or without a physical presence in the country, are well aware of the country’s booming cross border e-commerce industry, which grew over 30 percent in 2015 despite the slowing of...

/ August 5, 2016

Data Dump: China’s Taxman Wants to Know More

The State Administration of Taxation (SAT) recently requested that approximately 1,000 foreign and domestic companies provide a wide range of tax, financial, and accounting data, raising US-China Business Council (USCBC) member company concern about the intent and intrusiveness of the...

/ June 13, 2016

China Plugs Cross-border E-commerce Import Tax Loophole

The Chinese government has for the first time clarified tax policies for goods imported under the cross-border e-commerce model in an effort to regain control of the loosely regulated market. This new policy can enable foreign merchants to sell imported...

/ May 9, 2016

Drop in China’s social insurance rates could cut labor costs

Rising labor costs in China are setting off alarms with foreign investors because of increasing minimum wages and living standards, as well as the extensively developed social security system. However, as the central government exerts pressure to maintain economic growth...

/ May 6, 2016

Life Services Companies Catch a Break

A new value-added tax (VAT) reform has recently been implemented in China that could fundamentally alter the accounting systems of small and medium enterprises doing business within the country.

/ May 4, 2016

13th Five Year Plan Stresses Economic Restructuring

The PRC National People’s Congress recently released China's 13th Five-Year Plan (FYP) on National Economic and Social Development to outline economic policies and targets to drive industry development in China through 2020. As companies form their corporate objectives, identifying areas...

/ April 14, 2016