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Q&A

How is residency defined under Indian law?

How is residency defined under Indian law?

Personal taxation in India depends on the income source and a person’s residential status, which is determined by the length of time spent in India. Residential statuses include: resident and ordinarily resident (ROR), resident but not ordinari...

Q&A

What should Chinese foreign-owned subsidiaries bear in mind when entering into s...

What should Chinese foreign-owned subsidiaries bear in mind when entering into s...

The subsidiaries must provide the services that are within their business scope.   For foreign-invested commercial enterprises or manufacturing wholly-owned foreign enterprises, the services must be provided in relation to their business scope...

Q&A

What are the common service agreements between Chinese foreign-owned subsidiarie...

What are the common service agreements between Chinese foreign-owned subsidiarie...

Indeed, service agreements vary largely based on the service that will be provided, however the main types of service agreements might include: Consulting services Commission agency services After-sales or technical support services

Q&A

What are the main terms that should be included in service agreements between re...

What are the main terms that should be included in service agreements between re...

The following items are advised to be included: The scope of services The fees for such services The payment method of such fees The liabilities when problems arise Other miscellaneous terms that the parties think fit

Q&A

When do tax liabilities arise in terms of services provision under Chinese law?

When do tax liabilities arise in terms of services provision under Chinese law?

As long as the service recipient or the service provider is located in China, tax liabilities will arise on the service income, notwithstanding the location of the provision of services. Indeed, the Chinese subsidiaries are the ones responsible for w...

Q&A

Is there any difference if the foreign headquarter is deemed to have a permanent...

Is there any difference if the foreign headquarter is deemed to have a permanent...

If a permanent establishment status is found for the foreign headquarter, a 25 percent corporate income tax will be payable on the service income. The tax rate is a deemed profit rate, which is determined by the tax authorities. Furthermore, the fore...

Q&A

What factors are to be taken into consideration whether a foreign-invested entit...

What factors are to be taken into consideration whether a foreign-invested entit...

What factors are to be considered when a foreign-invested entity is planning to constitute a permanent service establishment in China?

Q&A

What are the requirements for transfer pricing in China?

What are the requirements for transfer pricing in China?

The current system is largely based on the guidelines of OECD. The newest update on transfer pricing is the one promulgated in 2009 by the State Administration of Tax. The Chinese transfer pricing system is based on the arm’s length principle....

Q&A

What is the definition of related parties under Chinese law?

What is the definition of related parties under Chinese law?

There are many ways to be categorized as related parties, which includes: Ownership or control; Debts Senior/ executive management appointment Licensing of intangibles Raw materials/ spare parts control or supply Service provision or receipt ...

Q&A

What's the definition of related parties in terms of ownership or control under ...

What's the definition of related parties in terms of ownership or control under ...

Under Chinese Transfer Pricing Regulations, related parties is defined as follows: One entity, directly or indirectly, holds a total of 25 percent or more of another entity’s shares; or A third party owns or controls, directly or indirectly...

Q&A

How would the indirect shareholdings of a third party in other enterprises be ca...

How would the indirect shareholdings of a third party in other enterprises be ca...

How do you calculate the indirect shareholdings of a third party in other enterprises under Chinese law?

Q&A

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

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 RM...

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