China Tax/Business News Flash

Oct 2018, Issue 33

Profit level monitoring of cross-border related party transactions - the priority of China's anti-tax avoidance work in the future

Recently the State Administration of Taxation (SAT) emphasised that the general principle of China's anti-tax avoidance work in the near future is to seek improvement while ensuring stability, and the priority will be cross-border profit level monitoring. A pilot system for profit level monitoring has been rolled out in Jiangsu Province, which is anticipated to be gradually expanded to other provinces or municipalities. It is recommended that multinational groups operating in China strengthen their transfer pricing risk prevention and early warning system based on the implementation of reasonable transfer pricing policies, so as to actively manage tax compliance and mitigate risks.

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