On 13 July 2016 the SAT released an Announcement on the Enhancement of the Reporting of Related Party Transactions and Administration of Contemporaneous Documentation (Announcement 42).  Announcement 42 replaces the current documentation regulations as prescribed under SAT Circular on Implementation Measures for Special Tax Adjustments (Trial Implementation), Guoshuifa  No. 2 (“Circular 2”), and replaces and modernizes the existing related party transaction reporting forms as specified under SAT Announcement on PRC Annual Reporting Forms on Related Party Transactions, Guoshuifa  No. 114 (“Circular 114”). Although the timing of the release of China’s revised comprehensive transfer pricing regulations is uncertain at this stage, Announcement 42 should be considered the first of a series of regulations to localise OECD/G20 BEPS Project recommendations in China.