What are the rules for discharging transfer pricing obligations in China?

The nine “Enterprise Annual Reporting Forms for Related Party Transactions of the People’s Republic China” should be submitted, if the enterprise submitting has transactions with related parties that amounts annually to:

• Below RMB 200 million for tangible goods; or
• Below RMB 40 million for intangible goods,

The forms regarding transfer pricing obligations should be submitted when the enterprise is filing annual tax returns. These forms, in China, generally include the following information:

• Amounts and types of related party transactions
• Level of documentation available
• Methodology used to test the arm’s length nature of the transactions
• Level of profitability on these transactions