In a strong indication of its growing commitment to enforcing tax compliance, China’s State Administration of Taxation released updated indirect transfer rules to replace Notice 698. Tax professionals say the more stringent tax rules, which include safe harbour regulations, withholding tax obligations of the buyer, and clarifications of reasonable commercial purpose, are both welcome and concerning.
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Pillar two might be top of mind for many multinational companies, but the huge variations between countries’ readiness means getting ahead of the game now, argues Russell Gammon, chief solutions officer at Tax Systems.