As reported in our Tax Alerts issued in May, we are seeing an increasing trend of the tax authorities’ activities in tax inspection of corporate taxpayers. This trend now seems to be reaching Representative Offices (“RO’s”). In fact, since mid-2010 there has been growing number of inspections of ROs by regulatory bodies and tax authorities. These inspections commonly target those ROs which are alleged or suspected of engaging in prohibited activities. Recent regulatory and tax inspections have been very coordinated in their deliberations (inspection team comprising of both licensing and tax authorities) and sophisticated in their approach (extended scope and length of examination); and rigorous in their actions (strict measures against violations).
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Taking_care_of_RO_operations_EN.pdf