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 China
issued Circular 2 in 2009 introducing new Transfer Pricing regulations that enforce
stricter Transfer Pricing compliance and allows China tax authorities to tighten
the collection of Transfer Pricing documents. In line with requirements of Circular
2, various state tax bureaus are now issuing directives to collect and manage the
contemporaneous Transfer Pricing documents from the taxpayers.
Any non-compliance with the provisions of circular 2 or circulars issued by the
state tax bureaus mean penalties and further scrutiny by China tax authorities.
Multinationals need to review their Transfer Pricing documentation and Transfer
Pricing methods to avoid unnecessary exposure.
Key Highlights
- Some of the jurisdictions that have issued circulars include Shanghai, Shenzhen,
Tianjin, Shandong and Guangzhou.
- Recently Shenzhen tax bureau issued circular 11, which requires enterprises
with sales over RMB 100 million to submit their 2008 Transfer Pricing documents
report before March 20, 2010. The limit of RMB 100 million is less than
the limit set by circular 2 (RMB 200 million).
- Other state tax bureaus are also taking similar actions for collecting the Transfer
Pricing documents.
Japan
Japan Clarifies Transfer Pricing Documentation/Rules
Japan’s 2010 tax reforms proposal calls for significant Transfer Pricing reforms,
including documentation requirements that will affect foreign companies operating
in Japan. The proposal clarifies the required documents in certain categories and
companies may need to prepare for the anticipated transfer pricing documentation
rules and review their existing documentation…
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Hong Kong
Hong Kong adopts Exchange of Information Clause
A January 2010 law enables Hong Kong to adopt the Exchange of Information (EOI)
clause in its Comprehensive Double Taxation Agreement (CDTA). It can now enter into
Double Taxation Avoidance Agreements (DTAAs) with many countries. Key highlights
include penalty provisions for not providing the information required by EOI clauses…
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India
India Liberalizes Remittance and Receipt of Salary
India’s Central Bank recently issued a notification liberalizing remittance and
receipt of salary payments for employees seconded to India and for foreign nationals
employed by an Indian Company. The limit for salary that may be received outside
India is raised to 100%. The employees may be seconded to …
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China
China Calls for 2008 Transfer Pricing Documents
In line with China’s stricter Transfer Pricing Compliance regulations, various state
tax bureaus are now issuing directives to collect and manage the contemporaneous
TP documents from the taxpayers. . Some states require the report to be submitted
before March 20, 2010. Multinationals need to review their TP documentation …
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