2010 has continued to witness the development of China’s tax system to support the nation’s plan to promote economic restructuring by continuous implementation of the structural tax reduction policy and the co-ordination of inbound and outbound investment.
The new Corporate Income Tax Law of 2008 streamlined preferential tax treatments for foreign investors and domestic entities and brought with it formal transfer pricing documentation regulations issued within Guoshuifa [2009] No 2 (Circular 2). Since then China’s State Administration of Taxation (SAT) has increased its scrutiny of taxpayers engaging in related party transactions efforts that resulted in the reported conclusion of 167 transfer pricing audits and tax adjustments totaling CNY 16 billion in 2009.
Compulsory documentation submission
In the spring of 2010 tax bureaux in Beijing Tianjin Shenzhen and Shandong required that taxpayers not exempt from preparing contemporaneous documentation not only prepare but also submit...
