Foreign investors get tax dividend boost
September 12, 2012 | BY
clpstaff &clp articlesA new Announcement has lowered withholding tax in China, but foreign companies still need to comply with strict regulations from the State Administration of Foreign Exchange
The State Administration for Taxation (SAT) released the Announcement on the Recognition of the “Beneficial Owner” in Tax Agreements (关于认定税收协定中“受益所有人”的公告) on June 29 and it came into effect on July 1.
The Announcement reduces the burden for determining beneficial owners. It states that, when it comes to passive income under international tax laws, the dividend should be the main form of passive income compared with other royalties and interest.
Taxing dividends is sometimes a complex issue because it can be difficult to determine the beneficial owners. However, the Announcement employs a safe harbour principle for owners, lowering the burden for foreign investors and the SAT.
This premium content is reserved for
China Law & Practice Subscribers.
A Premium Subscription Provides:
- A database of over 3,000 essential documents including key PRC legislation translated into English
- A choice of newsletters to alert you to changes affecting your business including sector specific updates
- Premium access to the mobile optimized site for timely analysis that guides you through China's ever-changing business environment
Already a subscriber? Log In Now