Our collection of resources based on what we have learned on the ground
Resources
Q&A
What should Chinese foreign-owned subsidiaries bear in mind when entering into s...
- November 2012
- Free Access
The subsidiaries must provide the services that are within their business scope. For foreign-invested commercial enterprises or manufacturing wholly-owned foreign enterprises, the services must be provided in relation to their business scope...
Q&A
What are the common service agreements between Chinese foreign-owned subsidiarie...
- November 2012
- Free Access
Indeed, service agreements vary largely based on the service that will be provided, however the main types of service agreements might include: Consulting services Commission agency services After-sales or technical support services
Q&A
What are the main terms that should be included in service agreements between re...
- November 2012
- Free Access
The following items are advised to be included: The scope of services The fees for such services The payment method of such fees The liabilities when problems arise Other miscellaneous terms that the parties think fit
Q&A
When do tax liabilities arise in terms of services provision under Chinese law?
- November 2012
- Free Access
As long as the service recipient or the service provider is located in China, tax liabilities will arise on the service income, notwithstanding the location of the provision of services. Indeed, the Chinese subsidiaries are the ones responsible for w...
Q&A
Is there any difference if the foreign headquarter is deemed to have a permanent...
- November 2012
- Free Access
If a permanent establishment status is found for the foreign headquarter, a 25 percent corporate income tax will be payable on the service income. The tax rate is a deemed profit rate, which is determined by the tax authorities. Furthermore, the fore...
Q&A
What factors are to be taken into consideration whether a foreign-invested entit...
- November 2012
- Free Access
What factors are to be considered when a foreign-invested entity is planning to constitute a permanent service establishment in China?
Q&A
What are the requirements for transfer pricing in China?
- November 2012
- Free Access
The current system is largely based on the guidelines of OECD. The newest update on transfer pricing is the one promulgated in 2009 by the State Administration of Tax. The Chinese transfer pricing system is based on the arm’s length principle....
Q&A
What is the definition of related parties under Chinese law?
- November 2012
- Free Access
There are many ways to be categorized as related parties, which includes: Ownership or control; Debts Senior/ executive management appointment Licensing of intangibles Raw materials/ spare parts control or supply Service provision or receipt ...
Q&A
What's the definition of related parties in terms of ownership or control under ...
- November 2012
- Free Access
Under Chinese Transfer Pricing Regulations, related parties is defined as follows: One entity, directly or indirectly, holds a total of 25 percent or more of another entity’s shares; or A third party owns or controls, directly or indirectly...
Q&A
How would the indirect shareholdings of a third party in other enterprises be ca...
- November 2012
- Free Access
How do you calculate the indirect shareholdings of a third party in other enterprises under Chinese law?
Q&A
What are the rules for discharging transfer pricing obligations in China?
- November 2012
- Free Access
The nine “Enterprise Annual Reporting Forms for Related Party Transactions of the People’s Republic China” should be submitted, if the enterprise submitting has transactions with related parties that amounts annually to: Below RM...
Q&A
What does contemporaneous transfer pricing documentation mean?
- November 2012
- Free Access
Essentially, contemporaneous transfer pricing documentation is a detailed transfer pricing documentation to support the transactions between the related parties that are at arm’s length.
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