Webinar: Transfer pricing adjustments in China – What you should know

ITR and KPMG China hosted a webinar on March 10 to share insights into transfer pricing adjustments including the difficulties faced by MNEs and possible solutions available.

In association with KPMG China, the live webinar took place on March 10 at 9am GMT/5pm CST (Beijing time).

In managing transfer pricing (TP) policies and risks, many multinational enterprises resort to TP adjustments at the end of a financial year to either increase or decrease the local entity’s profitability to align its financial results with the TP policy of the group.

While year-end TP adjustments through the issuance of debit or credit notes are feasible and common in many developed jurisdictions, the same cannot be said for China.

Strict foreign exchange control regulations in China and other matters outside of TP, such as customs, make it difficult, if not impossible, for a Chinese entity to affect such an adjustment.

In this webinar, KPMG China’s TP and customs specialists provided insights into the technical position and shared their most recent experience in implementation of year-end TP adjustments, including discussions on the practical difficulties faced by as well as the possible solutions available to the Chinese subsidiaries of multinational enterprises.

Kevin Zhu
	Partner KPMG China T: +86 (21) 2212 3346 E: kevin.x.zhu@kpmg.com Kevin Zhu is a partner with KPMG’s Global Transfer Pricing Services group based in Shanghai. He started his TP advisory career in 2007 with KPMG Shanghai’s Global Transfer Pricing Services (GTPS) team. He was seconded to KPMG office in Germany (in 2010–11) and Hong Kong SAR (in 2011–12) dedicated to better serve those multinational companies with outbound and/or inbound investments. Kevin is now the head of transfer pricing in KPMG Shanghai. Since Kevin joined KPMG Shanghai’s GTPS group in 2007, his work has spanned across TP documentation, risk assessment, planning, business restructuring, dispute resolution (including audit defense and APAs), and tax valuations for his clients from various industries including consumer goods, pharmaceutical, chemical, industrial manufacturing, automotive, electronic, and financial services companies. His most recent experience includes developing and implementing contract services structures, year-end TP adjustments, intangible property development, tax valuation and migration, APAs, in addition to designing intercompany transaction structures and ongoing documentation assistance. Kevin is also frequently invited to lecturing at training events organised by the Chinese tax authorities.

Kevin Zhu

Partner

KPMG China

T: +86 (21) 2212 3346

E: kevin.x.zhu@kpmg.com

Kevin Zhu is a partner with KPMG’s Global Transfer Pricing Services group based in Shanghai. He started his TP advisory career in 2007 with KPMG Shanghai’s Global Transfer Pricing Services (GTPS) team. He was seconded to KPMG office in Germany (in 2010–11) and Hong Kong SAR (in 2011–12) dedicated to better serve those multinational companies with outbound and/or inbound investments. Kevin is now the head of transfer pricing in KPMG Shanghai.

Since Kevin joined KPMG Shanghai’s GTPS group in 2007, his work has spanned across TP documentation, risk assessment, planning, business restructuring, dispute resolution (including audit defense and APAs), and tax valuations for his clients from various industries including consumer goods, pharmaceutical, chemical, industrial manufacturing, automotive, electronic, and financial services companies. His most recent experience includes developing and implementing contract services structures, year-end TP adjustments, intangible property development, tax valuation and migration, APAs, in addition to designing intercompany transaction structures and ongoing documentation assistance.

Kevin is also frequently invited to lecturing at training events organised by the Chinese tax authorities.

Harry Zhang
	Partner KPMG China T: +86 21 2212 2789 E: harry.h.zhang@kpmg.com Harry Zhang has spent 18+ years in Trade and Customs area, he started his consulting experience since 2008 after he left China Customs as a deputy section chief of legal affair department. In the past 12+ years, Harry has served many clients in Customs and trade related matters. Harry has vast experience in local government authority and big 4 firms, as well as rich experiences in building up the customs and trade related consultancy business in mainland China and Hong Kong SAR. Harry has been with a US law firm specializing in trade and Customs area for 40 years, as the greater China practice leader. He built up strong and massive legal sense and relevant practical experience with various industries, including auto, medical, chemical, foods and beverage, electrical/electronic and luxury products. Harry has been involved in various types of customs projects in different industries, and has also been actively participating in the technology related customs projects.

Harry Zhang

Partner

KPMG China

T: +86 21 2212 2789

E: harry.h.zhang@kpmg.com

Harry Zhang has spent 18+ years in Trade and Customs area, he started his consulting experience since 2008 after he left China Customs as a deputy section chief of legal affair department. In the past 12+ years, Harry has served many clients in Customs and trade related matters.

Harry has vast experience in local government authority and big 4 firms, as well as rich experiences in building up the customs and trade related consultancy business in mainland China and Hong Kong SAR.

Harry has been with a US law firm specializing in trade and Customs area for 40 years, as the greater China practice leader. He built up strong and massive legal sense and relevant practical experience with various industries, including auto, medical, chemical, foods and beverage, electrical/electronic and luxury products.

Harry has been involved in various types of customs projects in different industries, and has also been actively participating in the technology related customs projects.

Choon Beng Teoh
	Director KPMG China T: +86 (21) 2212 4527 E: choonbeng.teoh@kpmg.com Choon Beng Teoh is a director with the global transfer pricing team of KPMG China based in Shanghai. Choon Beng has experience in multi-jurisdictional planning studies, dispute resolution, value chain analysis and restructuring of operating models, as well as leading and managing global transfer pricing documentation projects. His client portfolio includes top-tier multinational companies across a variety of industries including the pharmaceutical, automotive, retail, IT industries. He also occasionally co-authors articles on China related TP topics for publications. Choon Beng graduated with a law degree from the London School of Economics and is a chartered accountant with the Institute of Chartered Accountants in England and Wales. Prior to joining KPMG China, Choon Beng practiced in another leading accounting firm in London in the area of international tax and TP.

Choon Beng Teoh

Director

KPMG China

T: +86 (21) 2212 4527

E: choonbeng.teoh@kpmg.com

Choon Beng Teoh is a director with the global transfer pricing team of KPMG China based in Shanghai.

Choon Beng has experience in multi-jurisdictional planning studies, dispute resolution, value chain analysis and restructuring of operating models, as well as leading and managing global transfer pricing documentation projects. His client portfolio includes top-tier multinational companies across a variety of industries including the pharmaceutical, automotive, retail, IT industries. He also occasionally co-authors articles on China related TP topics for publications.

Choon Beng graduated with a law degree from the London School of Economics and is a chartered accountant with the Institute of Chartered Accountants in England and Wales. Prior to joining KPMG China, Choon Beng practiced in another leading accounting firm in London in the area of international tax and TP.