China's first nationwide tax investigation into dividend payments to overseas investors
In the past two months, a number of local-level tax authorities in China launched investigations into dividend payments to non-Tax Resident Enterprises (non-TREs) (hereinafter referred to as ‘Investigation’). This Investigation relates to an internal notice issued by China’s State Administration of Taxation (SAT) requesting local-level tax authorities to identify potential risk areas in relation to Corporate Income Tax (CIT) collection on dividends. It is the first time the SAT has launched such a widespread investigation into this area since 2008.
The Investigation sets out several key tax risk areas that Non-TREs and foreign invested enterprises (FIEs) in China should note in the repatriation cycle.
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