Expert Analysis

Roman Blazhko

Birchstrasse 160

Colin Farrell and Matthew Mui PwC Fighting tax avoidance has become a common effort of the international tax community to prevent companies from eroding the tax base of the source or resident countries and paying tax nowhere. And China is no exception. During 2012, China witnessed a significant growth in its tax collection through anti-tax avoidance efforts. According to the latest statistics published by the State Administration of Taxation (SAT), the 2012 total tax collection contributed from anti-tax avoidance operations amounted to RMB34.6 billion (around US$5.6 billion), representing a year-on-year growth of 45% over 2011, and 74 times the 2005 amount. The Chinese tax authorities initiated 233 anti-tax avoidance cases in 2012. Among the 175 settled cases, the average amount of tax collected per case was RMB26.2 million, and the largest single sum of tax collection amounted to RMB 843 million. Nine cases reclaimed tax of more than RMB100 million and 59 cases reclaimed more than RMB10 million.

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