Webinar – PRC indirect share transfers: tax burden rationalisation in a valuation downturn

Join ITR and KPMG China at 10am BST (5pm Beijing time) on April 18 2024 for an analysis of the tax treatment of indirect share transfers in China, and insights into potential developments

During this period of economic uncertainty and market volatility, the valuation of Chinese-based portfolios has experienced a significant decline and the IPO process has also slowed down dramatically, which leads to a negative impact on the investment return. Meanwhile, the tax calculation for indirect share transfers can be complicated, with high uncertainty and controversy in practice due to a lack of clear guidance under the prevailing tax rules in the People’s Republic of China (PRC).

In this context, international investors have an even higher expectation and need than ever before regarding the reasonableness of the tax treatment of PRC indirect share transfers. It is therefore essential to minimise the tax burden during a downturn of valuations, so as to enhance the investment return.

In this webinar, Milano Fang and Tim Zeng, M&A tax partners at KPMG China, will discuss the PRC’s prevailing tax treatment of, and calculations for, indirect share transfers and the major causes of an unreasonable tax burden. They will also share their observations on typical market practice and insights on a potential breakthrough via a modification to the calculation method, with the aim of rationalising the tax burden.

The free webinar offers the opportunity to raise questions for the speakers on the taxation of indirect share transfers in the PRC. Sign up here.

Topics

Milano Fang

M&A tax partner KPMG China

Milano is an M&A tax partner in the Beijing office, who is the national leader of the inbound M&A tax team of KPMG China. He has more than 19 years of professional tax experience in providing Chinese tax and regulatory consulting services to multinational companies and domestic enterprises, both private and state owned. His areas of expertise include private equity investment, and industrial, fast-moving consumer goods and logistics clients.

Milano has led various high-profile and large-scale tax due diligence projects, and has in-depth knowledge of tax planning and M&A transaction structuring. Using this experience, he leads the offshore indirect equity transfer team (i.e., Announcement 7) within KPMG China. Milano has helped the team to successfully conclude several high-profile Announcement 7 cases, and was invited as a trainer by the State Taxation Administration (STA) on Announcement 7-related issues.

He has wide connections with various tax authorities, from the STA to the local level, and rich experience of negotiation with them on greenfield investment and M&A restructurings.

Tim Zeng

M&A tax partner KPMG China

Tim is an M&A tax partner in the Shanghai office who is the in-charge partner of the pre- and post-deal structuring and integration service team of KPMG China. He has advised on many restructuring transactions, especially pre-IPO restructuring, the establishment of red-chip structures, and privatisation transactions. His main areas of expertise include private equity investment, healthcare and life sciences, TMT, the consumer market, industrial, and logistics.

Tim provides tax assistance in Chinese-related acquisition projects for clients such as private equity funds, investment institutes, and corporate groups. He has led vendor and buyer due diligence projects in various sectors and provided tax structuring services such as deal-related tax planning for buyers and sellers, and the design of investment and exit structures.

Tim has rich experience in dealing with tax and regulatory issues in a wide range of M&A transactions, especially related to Announcement 7 issues. In addition, he maintains close communication with the tax authorities, from the State Taxation Administration to the local level.