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Oct 2014, Issue 24

China's first nationwide tax investigation into dividend payments to overseas investors

In the past two months, a number of local-level tax authorities in China launched investigations into dividend payments to non-Tax Resident Enterprises (non-TREs) (hereinafter referred to as ‘Investigation’). This Investigation relates to an internal notice issued by China’s State Administration of Taxation (SAT) requesting local-level tax authorities to identify potential risk areas in relation to Corporate Income Tax (CIT) collection on dividends. It is the first time the SAT has launched such a widespread investigation into this area since 2008.

The Investigation sets out several key tax risk areas that Non-TREs and foreign invested enterprises (FIEs) in China should note in the repatriation cycle.

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Peter Ng
China and Hong Kong Tax Leader
Tel: +[86] (21) 2323 1828 Email
Edwin Wong
Tel: +[86] (10) 6533 2100 Email
Charles Lee
China South Tax Leader
Tel: +[86] (755) 8261 8899 Email