China: Tax treaty treatment of partnerships | KPMG Global
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China: Tax treaty treatment of partnerships, service PEs, international transportation

China: Tax treaty treatment of partnerships

China’s State Administration of Taxation issued Announcement 11 to supplement prior guidance on China’s income tax treaties—specifically guidance concerning the application of the income tax treaty provisions to foreign partnerships and service permanent establishments (PEs).


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The earlier tax treaty guidance was provided by Circular 75. The new guidance (Announcement 11) includes clarifications concerning the income tax treaty treatment of foreign partnerships and service PE timeframe calculations. There is also supplementary guidance addressing transport and entertainer articles of the income tax treaties in China’s network of tax treaties.

The new guidance is effective from 1 April 2018.

KPMG observation

Circular 75 is viewed as a substantive item of income tax treaty guidance and draws heavily on the commentary on the OECD Model Tax Convention (MTC). While it formally applies to the interpretation of the China-Singapore income tax treaty, the guidance is also reported to be relevant to interpretation of those treaties that have provisions similar to those in the China-Singapore income tax treaty.


Read a 2018 report prepared by the KPMG member firm in China

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