Die staatliche Steuerbehörde (SAT) hat mit Rückwirkung zum 1.1 ...

What’s New
I. Definition of taxable income of non-resident enterprises from equity transfer
� The Circular stipulates that the undistributed profits and any kind of aftertax-reservations
of the Chinese resident target enterprise are not allowed
to deduct from the consideration of the share transfer when define the
taxable income.
� The cost of the share deal should be the invested amount or the actual cost of
acquisition.
� The Circular regulates the applicable currency and exchange rate in calculation
of the cost.
II. Indirect share disposal among non-resident enterprises
If one of the following conditions is met,
� The offshore holding company transferred is located in a country/region with
an effective tax burden of less than 12.5%; or
� The offshore income is not taxable in the country/region where the offshore
holding company transferred located.
the foreign investor should provide the tax authority in charge of the Chinese resident
enterprise with relevant documentations within 30 days of the share deal contract
signed. The documentations should mainly include:
� The relationship among the foreign investor, offshore holding company transferred
and the Chinese resident enterprise in aspects of investment, operation,
sales & purchase and etc;
� Detailed information of the offshore holding company regarding operation,
management, personnel, accounting, assets and etc;
� Statement of reasonable commercial purpose of the share transfer.
Where a foreign investor indirectly transfers shares of a Chinese resident enterprise
through the abuse of form of organization and there are no reasonable commercial
purposes, the tax authority will have right to re-consider the nature of the share deal in
accordance with the substance-over-form principle and deny the existence of the
offshore holding company which is used for the tax avoidance purpose.
III. Under the situation that the foreign investor transferred the equities of several onshore
and offshore holding companies as a package at the same time, the transferred
Chinese resident company should submit the general package contract as well as the
subcontract relating to the Chinese resident company to the tax authority in charge. If
there is no separate subcontract, the transferred Chinese resident company should
submit detailed information of all holding companies transferred in the package to the
tax authority, and precisely allocate the contract price to the target companies which
are Chinese resident companies.
Infoletter/Nr. 2010/01-I - 21-01-10 Page 4 of 8