China: Guidance clarifying international tax rules, tax treaties

China: Clarifying international tax rules, tax treaties

China’s State Administration of Taxation in early March 2015 issued interpretative guidance pursuant to the income tax treaty between China and France that entered into force 1 January 2015.

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KPMG observation

The interpretative guidance under the income tax treaty with France is being viewed a significant document, in that it is seen as shedding light on the general application of China’s numerous income tax treaty agreements in relation to a number of complex matters.

For instance, the guidance provides insight as to how China is putting the work of the G20/OECD base erosion and profit shifting (BEPS) project into effect as well as providing guidance on the income tax treaty treatment of transparent entities, such as partnerships and collective investment vehicles (CIVs), and clarifying the use of China’s anti-treaty shopping rules.

Read a March 2015 report prepared by the KPMG member firm in China: Extensive clarifications to China’s international tax rules in context of new China France tax treaty

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