More transparent administrative guidelines for tax treaty benefit claims
The SAT Public Notice 2015 No. 60 (Public Notice 60) for claiming tax treaty benefits has been implemented from 1 November 2015. It introduced a brand new self-assessment mechanism for non-resident taxpayers to claim their tax treaty benefits, which changed Chinese tax authorities’ role from pre-approver to post-tax filing examiner.
To provide further internal guidance for the local-level tax authorities on their obligations and procedural matters under the new mechanism, the SAT recently issued Shuizongfa 2015 No.128 (Circular 128) to provide guidelines to local-level tax authorities on how to conduct assessment of the tax treaty benefit claims. With Circular 128, the tax authorities’ internal assessment procedures are now more transparent. Meanwhile, if consensus cannot be reached among different provincial tax authorities on the denial of tax treaty benefit claim on the same treaty provision by the same non-resident taxpayer, it shall be reported to the SAT for further assessment. This will give the non-resident taxpayer an opportunity to have its case reassessed at the top level.
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