Recently, a series of policies aimed at expanding domestic demand, promoting investment and reducing tax burden of enterprises and individuals are being released intensively.

With a view to promote the reform of administrative examination and approval for tax affairs and optimize the administration of tax convention treatment for non-resident taxpayers, the State Administration of Taxation (SAT) recently promulgated the Administrative Measures for Tax Convention Treatment for Non-resident Taxpayers, hereinafter referred to as, "Circular No.60". How does this impact on non-resident tax payers?

The question whether royalty should be charged into dutiable value of import goods or not still remains the top priority to overcome for China Customs Authority (CCA). Their interpretations on nature criteria, charge base and apportionment methods for the royalties also differ from multinational corporations, so a reasonable planning and effective communications in advance with CCA is of upmost importance to investors when setting up their business in China.

The Ministry of Finance ("MOF") has recently released the revised Administrative Measures for Accounting Files (Draft for Comment) (the "Draft') for public comment by June 27, 2015.

On 29 July 2014, the State Administration of Taxation (SAT) released Shuizongbanfa [2014] No. 146 (“Circular 146”, i.e. Notice regarding the launch of tax anti-avoidance investigations on remittance of substantial amounts of service fees and royalty payments) to urge tax authorities at all levels to carry out extensive tax investigations on substantial amounts of service fees and royalties payments made by domestic enterprises to their overseas related parties from 2004 to 2013. Further to Circular 146, on 18 March 2015, the SAT released SAT Announcement [2015] No. 16 (“Announcement 16”) emphasizing the arm’s length principle and economic benefits; particularly, it sets out the determining factors of non deductibility of fees paid to overseas related parties by PRC enterprises (hereinafter referred to as the “domestic enterprises”), it also lays out other related tax administration and collection issues.