Prepare for New Rules, More Audits in China, KPMG Tax Experts Warn Foreign Companies

Recent rule changes have created new issues and opportunities for foreign companies doing business in China, KPMG tax experts said in a webcast Aug. 1.

Foreign companies should review new rules for tax benefits, be prepared for more audits, and should understand China’s permanent establishment (PE) rules to avoid unexpected tax liabilities, the experts said.

A number of new rules that took effect this year could bring tax savings to companies and their employees, said Penny Chen, senior manager of international corporate services at KPMG.

Under China’s State Administration of Taxation (SAT) Announcement [2012] No. 18, the cost of equity ...