China has published a discussion draft Implementation measures for special tax adjustments which would comprehensively revise circular 2, China’s main transfer pricing guidance. The draft contains detailed rules for transfer pricing adjustments, cost sharing, CFCs, thin capitalisation and GAAR. It also incorporates a number of BEPS changes amended to China’s specific economic environment. The draft also proposes country by country reporting to tax authorities in line with the G20/OECD BEPS proposals. There are also stronger local and master file transfer pricing documentation requirements.
The draft ‘is a highly significant document, clarifying the Chinese approach to TP investigations and analysis, introducing new TP methodologies, and significantly expanding TP documentation requirements,’ writes KPMG. Comments are due by 16 October 2015.
China has published a discussion draft Implementation measures for special tax adjustments which would comprehensively revise circular 2, China’s main transfer pricing guidance. The draft contains detailed rules for transfer pricing adjustments, cost sharing, CFCs, thin capitalisation and GAAR. It also incorporates a number of BEPS changes amended to China’s specific economic environment. The draft also proposes country by country reporting to tax authorities in line with the G20/OECD BEPS proposals. There are also stronger local and master file transfer pricing documentation requirements.
The draft ‘is a highly significant document, clarifying the Chinese approach to TP investigations and analysis, introducing new TP methodologies, and significantly expanding TP documentation requirements,’ writes KPMG. Comments are due by 16 October 2015.
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