China tax alert: Transfer Pricing Focus - Issue 1, January 2013
The Chinese tax authorities have further strengthened the administration of contemporaneous transfer pricing documentation(TPD) and included various additional requirements. Taxpayers in China should pay more attention to certain issues while preparing the documentation to fulfill the requirements of the tax authorities. Here we have summarized the recent developments, focuses and our observations on TPD preparation. In order to effectively respond to tax authorities’ scrutiny on TPD, taxpayers should raise their awareness of transfer pricing risk management and be more vigilant in TPD preparation. Meanwhile, taxpayers should also maintain regular and open communication with the in-charge tax authorities and be prepared to respond to their requests in a timely and proper manner.