More practical for offshore indirect transfer reporting and assessment
With the promulgation of State Administration of Taxation (SAT) Public Notice  No.7 (Public Notice 7) in early 2015, China tax authorities has outlined a new landscape for tax treatments on offshore indirect transfer of China Taxable Properties (hereinafter as 'offshore indirect transfer'). Public Notice 7 provides important guidelines regarding the factors for assessing reasonable commercial purpose, safe harbour rule, voluntary reporting regime and withholding obligation, etc. However, there are still some uncertainties, particularly on procedural matters, that need to be clarified.
After receiving feedbacks and comments on Public Notice 7 from taxpayers and stakeholders, the SAT recently released Shuizongfa  No.68 (Circular 68) to provide further internal guidance for the local-level tax authorities on tax procedural / administrative matters in relation to offshore indirect transfer under Public Notice 7. Foreign investors undergoing or planning an offshore indirect transfer should note this development and get themselves familiar with the procedure set out in Circular 68 to handle the transaction.
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