NEW CIRCULAR ON TRANSFER PRICING AUDIT TARGETS IN CHINA

The Chinese State Administration of Taxation (SAT) recently issued a new circular with guidance on how the PRC tax authorities will handle fiscal year 2004 transfer pricing tax audits and selection criteria for identifying transfer pricing audit targets. Transfer pricing audit targets will be select...

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Bibliographic Details
Published in:Journal of International Taxation 2004-10, Vol.15 (10), p.15
Main Authors: Cannon, Mike, Pan, Alex, Boggess, Diane, Hung, Hsin
Format: Article
Language:English
Subjects:
Audits
Information sharing
International taxation
Tax audits
Transfer pricing
Online Access:Get full text
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Summary:The Chinese State Administration of Taxation (SAT) recently issued a new circular with guidance on how the PRC tax authorities will handle fiscal year 2004 transfer pricing tax audits and selection criteria for identifying transfer pricing audit targets. Transfer pricing audit targets will be selected primarily from 5% of the enterprises with sustained losses, 3% of the enterprises with marginal profit or loss accompanied by an increase in their operational scale, and 2% of the enterprises with fluctuating profits. To support effective transfer pricing scrutiny and subsequent joint transfer pricing audits, the SAT requires information sharing among the various tax bureaus.
ISSN:1049-6378