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Canadian Seconded Workers in China Can Create a PE 

Global Tax Adviser


May 21, 2013


Claudia Ku
Toronto, International Corporate Tax


China's tax authorities have issued guidance on when the cross-border secondment of expatriate workers into China by foreign enterprises may give rise to a taxable presence in China. Where a "home entity" assigns expatriate workers to work with a "host entity" in China, this assignment can give rise to a permanent establishment (PE) in China. Generally, China's tax authorities will consider whether the "home entity" (i.e., Canco) bears all or part of the responsibilities and risks in relation to the work products of the seconded workers and whether the "home entity" normally reviews and appraises the job performance of the seconded workers.

If the establishment or place of business through which the services are provided is of a relatively fixed and permanent nature, it may be regarded as a permanent establishment in China.


For more information, contact your KPMG adviser.





Information is current to May 21, 2013. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

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