Category: Tax

Global Protectionism will not Stymie Chinese Deal-Making

Chinese companies collectively spent nearly $200 billion buying their foreign counterparts in the first nine months of 2016, with an additional increase in spending expected in the final quarter of the year. China’s historical emphasis on resources has been replaced...

/ March 20, 2017

Understanding China’s Tax Offenders Blacklist System

On April 16, 2016, China’s State Administration of Taxation (SAT) published amended measures to what is known as the blacklist system against tax illegalities. The amended measures, which came into effect on June 1, 2016, add a credit repair mechanism...

/ March 6, 2017

An Overview of China’s VAT Reform

Hailed as China’s most significant tax reform in more than two decades, the value-added tax (VAT) was comprehensively implemented as the country’s only indirect tax in 2016, effectively replacing the business tax (BT). The reform is part of Beijing’s efforts...

/ February 24, 2017

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