Sep 2010
China has concluded double tax agreements ("DTA") with 95 countries / regions to date. The tax residents of these countries / regions ("treaty residents") may be eligible for the relevant treaty treatments with respect to their income from China. With the increasingly tightened administration on non-tax residents' taxation, the implementation of DTAs has also come under close scrutiny of the Chinese tax authorities in recent years.
On 26 July 2010, the State Administration of Taxation ("SAT") issued a Departmental Interpretation Notes ("DIN"), by way of Guoshuifa [2010] No.75 ("Cover Circular"), for the DTA concluded between China and Singapore which entered into force on 1 January 2008 ("China / Singapore DTA"). The DIN represents the SAT's effort for the first time to introduce a set of technical views, interpretation and practice guidelines for the implementation of a DTA in such a comprehensive manner. More importantly, this set of interpretation is also applicable to other DTAs concluded by China if the provisions of the relevant articles in those DTAs are the same as those in the China / Singapore DTA.
While further analysis on the DIN are to be covered in a series of our News Flash on different key topics, this News Flash specifically highlights our insights on the background, objectives, impact, application, etc. as well as the general provisions in the first four articles of the DIN.
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A milestone in the development of China's double tax agreements (pdf file, 117KB) for your reference.
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