Chinese tax developments: Tax enforcement strengthened

Holding company structures become subject to further challenge

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Multinational companies and investors doing business in China need to be aware of a number of significant tax developments which, taken as a whole, further signal that the China tax authorities are taking a "substance-over-form" approach to tax enforcement. The authorities are focused on structures and transactions that are considered to lack business purpose and(or) commercial substance and will, in certain cases, deny the intended tax benefits. The latest step toward this trend is the State Administration of Taxation's release of Guoshuihan (2009) No. 698 on 10 December 2009, which strengthened the taxation of capital gains derived by non-residents, following the release of Guoshuihan (2009) No. 601 in late October, which sets out guidelines on the interpretation and determination of the term "beneficial owner" under double tax treaties.

Please join a panel of Ernst & Young's international tax professionals for this timely webcast to update you on this important development in China and discuss what steps can be taken to deal with these challenges. This session will focus on both the technical and commercial aspects of these recent developments taken as a whole and provide guidance and insight on how to best approach these challenges. To register for this webcast, click on the link above.