In 2016 and 2017, the State Administration of Taxation (SAT) issued several circulars to update its anti-tax avoidance rules (e.g. transfer pricing documentation, special tax investigation adjustments, mutual agreement procedures, advance pricing arrangements [APAs]). Amongst which, the most critical development is the new transfer pricing compliance requirements in China, which include annual reporting forms for related-party transactions (RPT forms), country-by-country (CbC) reporting, and transfer pricing documentation, all of which contain substantial changes to the existing rules. Specifically, the transfer pricing documentation requirement has adopted a three-tiered approach, including a master file, local file, and special issue file.
China’s legislation body passed the environmental protection tax law, which will take effect from 1 January 2018, to replace various existing pollutant discharge fees. Four categories of pollutants, including water pollutants, solid waste, air pollutants, and noise pollution, will be subject to the environmental protection tax.
See Recent focus of Chinese tax authorities in the Tax administration section for more information.