New tax incentive for overseas investors investing in the PRC

Cai Shui Circular on Issues Concerning the Policy of Provisional Deferral of Withholding Income Tax on Direct Investments Made by Foreign Investors Using Distributed Profits Announcement on Issues Relevant to the Implementation of the Policy of Provisional Deferral of Withholding Income Tax on Direct Investments Made by Foreign Investors Using Distributed Profits WHY DID CHINA RELEASE THIS TAX DEFERRAL POLICY? Circular on Several Measures for the Promotion of the Growth of Foreign Investment IS THIS TAX DEFERRAL SOMETHING NEW? HOW TO QUALIFY FOR THE TAX DEFERRAL? WHAT STEPS SHALL BE FOLLOWED IN ORDER TO ENJOY THE TAX DEFERRAL? CAN AN OVERSEAS INVESTOR CLAIM THE TAX DEFERRAL TREATMENT AFTER ACTUAL PAYMENT OF TAXES? UNDER WHAT CIRCUMSTANCE S WOULD THE TAX DEFERRAL BE DENIED? AND WHAT IS THE POTENTIAL LIABILITY? WHEN THE TAX DEFERRAL IS DENIED, IS THE OVERSEAS INVESTOR STILL ENTITLED TO THE BENEFITS OF AN APPLICABLE TA X TREATY OR ARRANGEMENT? Measures for the Administration of the Eligibility of Non-tax-resident Taxpayers for Tax Agreement Benefits OBSERVATION AND RECOMMENDATION Daisy Duan, Partner Linlin Cao, Associate King & Wood Mallesons