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Q&A

What is the arm’s length principle of transfer pricing?

What is the arm’s length principle of transfer pricing?

The arm’s length principal states that that the price charged for goods or services between two related parties must be the same as the price that would be charged if the two parties were unrelated.  Therefore the arm’s length p...

Q&A

What is contemporaneous documentation in China?

What is contemporaneous documentation in China?

Tax authorities across the world define contemporaneous documentation in different ways.  In China, contemporaneous documentation comes in the form of either a master file, local file, or a special file.  If tax authorities request document...

Q&A

What effects will China’s new transfer pricing regulations have on the present...

What effects will China’s new transfer pricing regulations have on the present...

On June 29, 2016, China’s State Administration of Taxation issued Announcement No.42, updating the requirements concerning related company transfer pricing.  These new regulations have been put into effect in an effort to help Chinese tax ...

Q&A

What is the significance of the comparable uncontrolled price method (CUPM) in C...

What is the significance of the comparable uncontrolled price method (CUPM) in C...

The Comparable Uncontrolled Price Method (CUPM) is used to establish the arm’s length price of a Related Party Transaction (RPT).  The CUPM does this by taking the given price of a transaction between two unrelated parties taking part in a...

Q&A

How is the resale price method (RPM) used to determine the arm’s length price ...

How is the resale price method (RPM) used to determine the arm’s length price ...

The Resale Price Method (RPM) establishes the arm’s length price of related party transactions (RPT) concerning the purchase of merchandise.  The Resale Price Method generally applies to transactions regarding products rather than services...

Q&A

How is the current education market in China?

How is the current education market in China?

The education market in China has witnessed tremendous growth in recent years. Already worth RMB 1.6 trillion in 2015, the size of the education market is estimated to nearly double to RMB 3 trillion by 2020, thanks to the rising middle class. Chines...

Q&A

What is the main challenge that foreign investors might face when entering China...

What is the main challenge that foreign investors might face when entering China...

Even though there are myriad of opportunities in China’s education industry, the state government has been rather suspiciousof foreign participation in this particular industry. This is mainly due to how closely intertwined it is with Chinese i...

Q&A

Despite rigid government controls over investment in the education industry in ...

 Despite rigid government controls over investment in the education industry in ...

Certain areas in education in China are encouraged and benefit from preferential policies. Vocational school is one example. As China is seeking a growth model that demands skilled labor, the state government is spending heavily into the development ...

Q&A

How can foreign companies invest in China’s education market?

How can foreign companies invest in China’s education market?

There are four main models that foreign companies in China can use to circumvent the restrictions posed by the country and penetrate its education market, with the first one being setting up self-owned pre- and K12 international schools for children ...

Q&A

Can foreign investment in China’s education industry profit from its operation...

Can foreign investment in China’s education industry profit from its operation...

Education in China is deemed as public cause, and China has therefore been reluctant to privatize the sector and has placed bans on the for-profit activities of educational institutions. But there are discrepancies across different pieces of legislat...

Q&A

What is the impact of China’s NGO laws on the education market and how should ...

What is the impact of China’s NGO laws on the education market and how should ...

China’s newly released NGO Law greatly differs from that of western countries. It is widely seen as part of President Xi Jinping’s efforts to restrict and control organizations whose interests are not in line with those of the Chinese Com...

Q&A

What are some potential risks of China's transfer pricing environment?

What are some potential risks of China's transfer pricing environment?

Although China's transfer pricing legislation has developed over the past 20 years, the country's transfer pricing administration is still considered to be very strict. Chinese tax authorities require taxpayers to make a related party filing in conju...

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