According to the Hong Kong APA guidelines, only resident and non-resident companies with a Permanent Establishment (PE) generating taxable income in Hong Kong can apply for an Advance pricing Agreement. Companies or PE’s which do not make taxable profits may not be eligible for the APA procedure which is aimed at reducing the risk of double taxation.
The APA procedure will require various documents to be submitted in stages defined below:
* The initial pre-filing
* Formal application
* Evaluation and analysis
* Negotiation and agreement
* Drafting , agreement and monitoring
China Authorities Explore Private Tax Ruling System
The Chinese tax authorities are considering proposals to implement an advance ruling system that would simplify tax administration and streamline procedures for filing taxes in the country.
The move could prove beneficial to multinationals that are currently grappling with China’s complex tax system.
The focus of the Advance Tax ruling (also referred to as Private Tax ruling) is improved taxpayer service by not only helping tax payers comply with the respective tax regulations, but also providing them tax related risk management advice.
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