China Tax Alert - Issue 19, August 2013
On 27 August 2013, China became the 56th
signatory to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (’the Convention’) at the headquarters of the OECD in Paris. Through information exchange and joint tax examinations with other member countries, China is raising its efforts to combat aggressive tax planning and evasion to a new level.
The Convention allows China to automatically or spontaneously exchange information with other signatories and conduct simultaneous tax examinations on a multinational company (MNC) both within and outside China. This easy access to a MNC’s tax-related information from another foreign jurisdiction creates a new deterrent for any tax arrangement whose feasibility depends on its lack of full visibility to Chinese tax authorities.