Q&A

For foreign investors doing business in China, securing DTA benefits is an important measure for reducing the tax burden as stipulated by Chinese tax law and thereby maximizing profit. In addition to satisfying the specific requirements of the relevant DTA agreement and those mentioned above, certain administrative procedures must be followed according to Chinese laws and regulations, as outlined in Circulars 124 and 290. The process of applying for DTA benefits can be quite onerous, requiring the applicant to submit a preferential tax treatment form as well as certain forms of documentation from the government of his/her country of tax residency. In general, there are two pathways of administrative measures—either “approval” or “record-filing” with the relevant tax bureau—to be followed, depending on the type of relief being claimed.