Global

Details

  • Service: Tax, International Corporate Tax, International Executive Services, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 1/14/2013

China - Tax relief for “land-rich enterprise,” substantial shareholding transfers 

January 14:   China’s State Administration of Taxation issued Announcement 59 to clarify the manner in which the capital gains tax provisions of China’s income tax treaty agreements are to be applied to capital gains realized on transfers of equity interests in Chinese enterprises by non-residents.

Announcement 59 (31 December 2012) aims to provide clarity to non-residents with regards to the availability of income tax treaty relief from PRC withholding tax on capital gains arising from disposals of Chinese equity investments. Specifically, Announcement 59


  • Provides guidance on the determination of whether China retains the right to impose a withholding tax of 10% on gains arising on the disposal of equity in a Chinese enterprise by a nonresident
  • Elaborates on the circumstances in which a Chinese enterprise is considered to derive more than 50% of its value from immovable property
  • Addresses the circumstances in which a non-resident disposes of equity in a Chinese enterprise is considered to hold at least 25% of that enterprise

Read a January 2013 report [PDF 377 KB] prepared by the KPMG member firms in China and Hong Kong: Tax treaty relief on transferring land-rich enterprises and substantial shareholding interests clarified




©2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.


The KPMG logo and name are trademarks of KPMG International.


KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.


The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor 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 on such information without appropriate professional advice after a thorough examination of the particular situation.


Direct comments, including requests for subscriptions, to us-kpmgwnt@kpmg.com.
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.

 

Share this

Share this

Subscribe

Subscribe to receive the latest TaxNewsFlash email alerts (you must select the option for TaxNewsFlash)


Already a Subscriber? Login


Not a member? Subscribe now

Contact us