Case sheds light on future for Chinese transfer pricing
January 26, 2011
Jack Grocott TPW
A recent transfer pricing dispute in China has reiterated the country’s shift from enforcement and administration towards complex transfer pricing issues and alignment with internationally recognised practices.
It is believed the tax authorities did their own valuation work in the dispute, rather than rely on external advisers.
The case related to the conclusion and reporting of a valuation of capital gain in an equity transfer transaction in Dalian, a city in northeast China, where a multinational company agreed to pay corporate tax worth RMB11 million ($1.7 million) on the capital gain.
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