China Tax Alert - Issue 9, May 2013
On 19 April 2013, the State Administration of Taxation (SAT) issued Announcement 19 to provide guidance on when cross-border secondment of expatriates by foreign enterprises into China may create a PRC taxable presence. Announcement 19 is a welcome development for multinational companies (MNCs) doing business in China. It reduces uncertainty as to when a foreign enterprise might create Chinese Corporate Income Tax (CIT) exposures through its secondment arrangements. It may also facilitate the process of obtaining tax clearance by a Chinese company when it seeks to make reimbursement remittances overseas pursuant to secondment arrangements.