• Service: Tax, Global Transfer Pricing Services (GTPS), International Tax Services
  • Type: Publication series, Regulatory update
  • Date: 1/11/2013

Tax treaty relief on transferring land rich enterprises and substantial shareholding interests clarified 

China Tax Alert - Issue 1, January 2013


On 31 December 2012 the State Administration of Taxation (SAT) of the People’s Republic of China (PRC) issued Announcement 59, which clarifies the manner in which the capital gains tax articles of China's double tax agreements (DTAs) are to be applied. The clarifications are generally welcome as they provide greater certainty to non-residents with regards to the availability of DTA relief from PRC withholding tax (WHT) on capital gains arising from disposals of PRC equity investments. However, the clarified approach could potentially overstate the degree to which Chinese enterprises are identified as land-rich in equity transfers and result in frequent denials of DTA relief on these grounds.


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