New Issue of China Briefing: Transfer Pricing and Cross-Border Inter-Company Transactions

November 2, 2011 Posted by China Briefing Reading Time: 3 minutes

Nov. 2 – The new issue of China Briefing magazine, titled Transfer Pricing and Cross-Border Inter-Company Transactions, is out now.

In this issue, we discuss cross-border inter-company transactions (pre and post-establishment) and the documentation you will need to submit to keep up with the increasingly powerful transfer pricing regulation implementation in China. The potential complexity involved in these transactions means that they are sources of confusion to many China investors.

We provide some pointers to help investors navigate these complex issues by first addressing the payment arrangements among HQs, WFOEs and clients in China, as well as each arrangement’s tax implications. We include the specific steps a WFOE in China has to undergo in order to remit funds between its headquarters and clients, and alert investors as to when transfer pricing issues and duplicate taxation issues are triggered.

Next, we address initial setup cost payments. The rules and regulations relating to foreign currency and incorporation in China leave no perfect solution. We discuss the methods of dealing with these payments, along with the feasibility and risks/limitations of each method.

Finally, we look at China’s transfer pricing regulations and the documentation investors are required to prepare, submit and retain in order to support the arm’s length nature of their related party transactions.

In this issue:

Dealing with Initial Setup Costs
Payment Arrangements among Headquarters, WFOEs and Clients in China
Contemporaneous Transfer Pricing Documentation Requirements in China

This issue of China Briefing – Transfer Pricing and Cross-Border Inter-Company Transactions – is available for immediate PDF download on the Asia Briefing Bookstore, priced at US$10.

Dezan Shira & Associates is a boutique professional services firm providing foreign direct investment business advisory, tax, accounting, payroll and due diligence services for multinational clients in China, Hong Kong, Vietnam and India. For further information or advice on transfer pricing in China, please email info@dezshira.com.

Transfer Pricing in China 2016
Transfer Pricing in China 2016, written by Sowmya Varadharajan in collaboration with Dezan Shira & Associates and Asia Briefing, explains how transfer pricing functions in China. It examines the various transfer pricing methods that are available to foreign companies operating in the country, highlights key compliance issues, and details transfer pricing problems that arise from intercompany services, intercompany royalties and intercompany financing.

Annual Audit and Compliance in China 2016
In this issue of China Briefing, we provide a comprehensive analysis of the various annual compliance procedures that foreign invested enterprises in China will have to follow, including wholly-foreign owned enterprises, joint ventures, foreign-invested commercial enterprises, and representative offices. We include a step-by-step guide to these procedures, list out the annual compliance timeline, detail the latest changes to China’s standards, and finally explain why China’s audit should be started as early as possible.

Managing Your Accounting and Bookkeeping in China
In this issue of China Briefing, we discuss the difference between the International Financial Reporting Standards, and the accounting standards mandated by China’s Ministry of Finance. We also pay special attention to the role of foreign currency in accounting, both in remitting funds, and conversion. In an interview with Jenny Liao, Dezan Shira & Associates’ Senior Manager of Corporate Accounting Services in Shanghai, we outline some of the pros and cons of outsourcing one’s accounting function.