Transfer Pricing ASIA 407 pages PDF Format (emailed to you) $395

**Download a FREE 15 page**
Transfer Pricing Asia Overview

China Implements Transfer Pricing Procedures

An enterprise, when considering transfer pricing in China, should take into account that:

• The Chinese tax authorities cast “associated enterprises” in a broad net.
• The Chinese tax authorities have emphasized the transfer pricing enforcement process.
• The Chinese transfer pricing regulations are comprehensive in scope. As such, the Chinese transfer pricing regulations address advance pricing arrangements, cost sharing agreements, controlled foreign corporations, thin capitalization, and anti-avoidance provisions.

Associated enterprises include one of the following relationships between an enterprise and another enterprise, business, or individual based on one of the following: share ownership based on a 25 percent threshold, debt relationship based on 50 percent of the party’s actual received capital or 10 percent or more of the total debts the party owes, appointment of senior management personnel, concurrent management, dependency based on intangibles, control of purchase or sales, the providing controlled services, or substantial operational control.

The Chinese government requires a taxpayer doing business in that country to report related-party relationships to the State Administration of Taxation (SAT) by submitting nine specific documents to the tax authorities on an annual basis:

Form 1 – Related Party Relationships
Form 2 – Summary of Related Party Transactions
Form 3 – Purchases and Sales
Form 4 – Services
Form 5 – Intangible Assets
Form 6 – Fixed Assets
Form 7 – Financing
Form 8 – Outbound Investment
Form 9 – Outbound Payments