Two years ago, the central tax authorities in China, the State Administration of Taxation
(SAT), announced its intention to revamp the PRC regulatory framework for transfer pricing
by incorporating features from BEPS (tax base erosion and profit sharing) and advocating China's tax interests vigorously in a draft circular. Since then, the SAT has kept its promise and steadily issued new regulatory guidance to update China's pre-existing transfer pricing system.
In 2016 we saw two heavy-weight bulletins in Circular 42, which deals with transfer pricing documentation, and Circular 64, which addresses China's APA program. These new circulars have profound impact on the global supply chain management of US headquartered multinational companies (MNCs) with China operations
In March 2017, the SAT issued Circular 6, the third major regulation in the last 12 months to complete the setup of the new transfer pricing regime in the post BEPS era. Circular 6 covers important topics such as transfer pricing methods, transfer pricing adjustment, and MAP process related to transfer pricing. It affects MNCs in multiple fronts including TP policy establishment, TP documentation compliance, TP audit defense and TP controversy resolution. Its significance on MNC's transfer pricing compliance and risk management in China
should not be overlooked.
AmCham China will host a transfer pricing roundtable on July 19 dedicated to Circular 6. In this session, senior transfer pricing professionals will discuss with you the following topics:
- The current transfer pricing environment in China
- The critical elements in Bulletin 6
- Transfer pricing audit in China
- Transfer pricing strategies under the New Regime