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China Announces a Unified Measure Regarding Foreign Company’s Representative Office’s Taxation
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Posted by Cfo World News
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mercredi, 30 juin 2010 |
Considering the comparatively simple and convenient setting up process and relatively low operating costs, registering a Representative Office (RO) is generally the initial step for foreign companies wishing to invest in and experience the local market. On 20 February 2010, the State Administration of Taxation (SAT) issued a circular entitled Tentative Measures for the Administration Offices of Foreign Enterprises, to regulate and unify previous rules covering taxation matters of ROs established in the PRC.
Circular 18 takes retroactive effect from 1 January 2010. Taxand China examines the impact on non-resident entities and actions that can be taken immediately by non-residents.
A signifying difference from previous tax treatments of ROs is that ROs can not apply for Enterprise Income Tax (EIT) exemption and all exemptions previously approved should be cleared. ROs are required to adopt the “actual amount method” or “deemed amount method” to determine taxable turnover and profits based on their actual conditions. However, ROs which are eligible for an exemption from EIT pursuant to a relevant tax treaty (or tax arrangement) may still apply for the exemption in accordance with the Administration Measures on the Application for Preferential Treatment under a Tax Treaty by Non-residents. ... read more
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