Tax Analysis provides an in-depth analysis of all tax subjects and business-related changes.
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Individual income tax treatment of contribution of nonmonetary assets clarified
P217/2015 – 18 May 2015
China’s Ministry of Finance and the State Administration of Taxation (SAT) jointly issued guidance on 30 March 2015 that clarifies the individual income tax (IIT) treatment of nonmonetary asset investments by individuals (Caishui  No. 41, (Circular 41)). The SAT subsequently issued guidance (Bulletin  No. 20, (Bulletin 20)) on 8 April, implementing the rules under Circular 41.
Circular 41 provides that an investment with nonmonetary assets by individuals should be treated as two simultaneous transactions: a transfer of the nonmonetary assets and the investment. It further provides that gains derived by an individual from the transfer of nonmonetary assets must be calculated as "gains from the transfer of property." The circular also provides that the trial installment payment method applicable in the China (Shanghai) Pilot Free Trade Zone (FTZ) will be expanded nationwide. Bulletin 20, which became effective on 1 April 2015, clarifies issues relating to the application of Circular 41, such as the calculation of taxable income, registration of installment tax payment plan, as well as the reporting obligation of an investee enterprise.
P210/2015 – 30 January 2015
BEPS Actions 8, 9, and 10: Discussion draft on revisions to chapter I of the transfer pricing guidelines (including risk, recharacterization, and special measures)
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