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Today's Challenges in China
As China continues to grow as a global manufacturing powerhouse and a market place too important to ignore, foreign direct investments ("FDIs") into China have risen significantly in recent years. Within China, the local economy is becoming increasingly market-driven, where Chinese enterprises - both state-owned and private - are looking to invest outside China. All these have resulted in an increase in cross-border related party transactions.
China's accession to the WTO has called for a broad reduction in tariff rates in the coming years. In order to protect its tax revenue base after the WTO accession, the Chinese tax authority has been actively strengthening its transfer pricing legislation and scrutiny.
Regulatory environment
China is the second country in Asia (after Japan) to pass detailed transfer pricing and advance pricing arrangement ("APA") regulations. In 1998, the Chinese State Administration of Taxation ("SAT") issued Guoshuifa No. 59 under the heading Tax Administration and Procedures for Transactions between Related Parties ("Ruling 59"). In view of a series of transfer pricing related regulations issued in China since the introduction of the Ruling 59, the SAT introduced several changes to the Ruling under the cover of Guoshuifa No. 143 ("Ruling 143"). Other Rulings issued by the SAT include Tentative Provisions for Application of Mutual Agreement ("MAP") Procedures or Guoshuifa No. 115.
In the brochure below, we'll look at special features of transfer pricing in China, and our approaches to help companies to manage potential risks and optimise profits via benchmarking, advance pricing agreements, profit alignment within China, defense documentation and cost sharing arrangement.
Get Your Copy Here
Read more by downloading our Transfer Pricing in China - Service Brochure (pdf file, 704KB) for your reference. |
