corporate income tax

China issues new measures for the General Anti-Avoidance Rules

The State Administration of Taxation issued on December 2, 2014 the Administrative Measures for the General Anti-Avoidance Rules (Trial Implementation) and the Measures became effective on February 1, 2015.  The Measures further clarify the scope of application and the procedures of GAAR. The GAAR represent procedures to fight against tax evasion, tax avoidance and abuse of trade treaties. Henceforth, the State Administration of Taxation (SAT) intends to carry out investigations on corporate transactions without commercial purpose and economic substance.

SAT Fights Tax Avoidance with Investigation

Recently, the State Administration of Taxation (SAT) accelerated its commitment to fight tax avoidance in China. The tax authority decided to carry out investigation on Chinese subsidiaries sending money offshore via service fee or royalties to related entities. Indeed, the SAT issued the Circular of the General Office of State Administration of Taxation on Carrying out Anti-tax Avoidance Investigation on Large Sum External Payments on July 30, 2014 (“Circular No. 14-146”).

Circular 75: China introduces new policy for accelerated depreciation of fixed assets

In pursuant to the announcement made on September 24, 2014 introducing new policy for accelerated fixed asset depreciation method, the Ministry of Finance and the State Administration of Taxation (SAT) jointly released a circular, Caishui [2014] No. 75 (Circular 75). The circular sets out guidance for the new policy. The circular will become retroactively effective as of Jan 1, 2014.

China extends corporate income tax incentives for western region

Three years ago, China’s authorities- Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation issued circular 58 offering tax incentives to companies located in western part of China for its regional development. The circular provided for an extension of the tax incentives for China's western region from 1 January 2011 to 31 December 2020.


The International Department of State Administration of Taxation (“SAT”) has released a new SAT announcement, Announcement No.19. The announcement clarifies when the secondment of an employee by a non-resident company will give rise to a taxable presence (also known as establishment) in China. The announcement became effective on June 1, 2013. This announcement is an expansion of Circular 75 released in 2010 providing further clarification on the Permanent Establishment (“PE”) risk associated with certain secondment arrangements.
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