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Post by Sapphire Capital on Aug 7, 2008 1:41:15 GMT 4
New transfer pricing rules in China will put pressure on companies Source: Joanna Faith
Companies doing business in China are expecting scrutiny from the country's tax authority to increase after the release of highly anticipated new transfer pricing regulations, expected in September.
"We anticipate that China's new TP regulations will intensify the tax authority's focus in the area of transfer pricing," said Steven Carey from Transfer Pricing Associates in Hong Kong. "Companies operating in China should ensure their operational and tax planning strategies align and comply with the new domestic tax law requirement," he said.
It is expected the legislation will address the minimum threshold of related party transactions above which the documentation requirements will apply, the period in which documentation needs to be submitted following a request, the approach that the tax authorities will take when making transfer pricing adjustments, the application of thin-capitalisation rules and how the advance pricing agreement programme will be conducted.
"We are expecting clarity on various topics that have previously been the subject of speculation," Carey said.
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