Text of Chinese Regulation on Special Tax Adjustments

Summary

This Special Report provides information and analysis on how Chinese regulations integrate transfer pricing, anti-avoidance controls, controlled foreign corporation rules, and financial reporting requirements. These guidelines will elevate the level of compliance, complexity, and risk facing overseas investors and should end any laissez-faire approach taxpayers previously may have taken to transfer pricing in China. Translations of 43 new draft forms are also included.

Below are some selected highlights from this Special Report

• Disclosures on Related-Party Transactions
• Administration of Contemporaneous Documentation
• Transfer Pricing Methods
• Transfer Pricing Investigations and Adjustments
• Cost Sharing Arrangement
• Administration of Controlled Foreign Corporations
• Administration of Thin Capitalization
• General Anti-Avoidance Rules
• Corresponding Adjustments and International Consultation

• Taxpayer Forms Related-Party Annual Report Form
• Sales and Purchases
• Transfer of Assets
• Offshore Payments
• Controlled Foreign Corporations Annual Report Form
• Table of Entity's Function and Risk Analysis
• Table of Financial Analysis on Related-Party Transactions
• Tax Authority Forms
• Notice of Transfer Pricing Investigation
• Checklist for Obtaining Accounting Records for Examination

Authors: Unofficial Translation by PricewaterhouseCoopers in Shanghai
Published: April 10, 2008