The China advance pricing arrangement (APA) annual report for 2019 recapitulates information about the APA program in China, and highlights the determination of the State Taxation Administration to steadily promote the APA program and to improve the quality of services provided by the tax authorities to taxpayers.
The number of agreed and signed APAs in 2019 reflects a historical high, and the APA report for 2019 reveals new trends in terms of industry types, transaction types, and transfer pricing methods involved in the concluded APA cases.
The tax authorities on 29 October 2020 published the 2019 APA annual report that summarises the latest implementation status of the APA program in China, and provides statistics on concluded APAs covering the period from 2005 to 2019.
Looking ahead, uncertainty in the global economy due to the disruptions caused by the coronavirus(COVID-19) pandemic as well as challenges from certain trade policies is viewed as prompting governments around the world to increasingly compete for tax revenues. With such uncertainties, taxpayers seek an environment that provides fair and certain tax administration to facilitate cross-border investments. In this regard, the Chinese tax authorities are viewed as continuing with their efforts to improve the business environment and to promote unimpeded trade and investments in China, as evidenced by the efforts to steadily advance the APA program in providing certainty to taxpayers and to help avoid and prevent double taxation.
It may be helpful for taxpayers to note the following with regard to categories of enterprises that might consider applying for an APA to manage their transfer pricing risks:
For more information, contact the Global Leader of KPMG’s Global Transfer Pricing Services:
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