The State Administration of Taxation issued a Bulletin (SAT Gong Gao  No.9) to clarify the recognition of “beneficial owners” for bilateral tax treaty purpose. The Bulletin will enter into force on April 1, 2018, when other two documents regarding recognition and interpretation of beneficial owners cease to be effective simultaneously, that is, Circular No. 601 (GuoShui Han No.601 SAT) and Bulletin No.30 (Gong Gao No.30).
On the one hand, the Bulletin allows benefits of tax treaty to be granted where abuse intention or consequence is not found, which increase the certainty of tax treaty application with less compliance cost; on the other hand, the Bulletin refers to outcome of BEPS Action 6 (Preventing the Granting of Treaty Benefits in Inappropriate Circumstances) and enhances the criteria for recognising “beneficial owners”, which defends against arrangements with higher abuse risks more effectively.
The Bulletin follows regulations of Circular No. 601 and Bulletin No.30, with partial amendments to some rules. The highlights of the Bulletin can be found as following:
With the fast growth of China’s economy and the continuous improvement of the comprehensive strength of domestic enterprises, as well as the implementation of the “One Belt, One Road” policy, an increasing amount of Chinese enterprises are beginning to expand their global footprint and establish their presence in Europe.
TPA Global has developed a practical roadmap of 6 steps meant to guide CFOs in their Journey of rising above troubles to reach a situation of full control. These steps are presented in a series of short video clips (3-5 minutes):