• Service: Tax, Global Transfer Pricing Services (GTPS)
  • Type: Business and industry issue, Publication series, Regulatory update
  • Date: 8/25/2014

The SAT’s formal assessment on service fees and royalty payments 

China Tax Alert: Transfer Pricing Focus - Issue 1, August 2014


In an area of immediate importance to taxpayers, the SAT recently instructed tax bureaus across the country to survey and report back in September regarding companies in their jurisdictions which have made service fee or royalty payments to related parties between the years 2004 and 2013; these years are eligible for potential tax adjustments since the statute of limitations for transfer pricing audits is 10 years. In addition, the SAT urged tax bureaus to formally begin registering transfer pricing audits now of companies which engaged in such transactions deemed to be especially suspicious.


Taxpayers should take care communicating with tax officials regarding these issues as they select potential audit targets, and in particular when preparing written materials for submission as these materials may be referenced later in a transfer pricing audit.


China tax alert: Transfer Pricing Focus
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