The Shenzhen Customs Authority and Shenzhen Taxation Bureau have jointly issued Circular No. 62 of 18 May 2022 on matters regarding the implementation of a mechanism for the collaborative (coordinated) management of transfer pricing for imported goods from related parties. The mechanism established by the Circular is meant to alleviate transfer pricing issues for enterprises importing goods from related parties, including issues of effective double taxation. Transfer pricing on imports often results in double taxation where the customs authority seeks an increase in the import price, increasing import duties and VAT, while the tax authority seeks a reduction in price, reducing deductions and increasing income tax. Because these are two independent authorities, an enterprise may be subject to both upward and downward adjustments on their related party imports.
Source Orbitax
Latest Posts in "China"
- China Releases Draft VAT Implementation Regulations for Public Consultation Ahead of 2026 Law Launch
- Shell Companies Exploit Agricultural Tax Benefits, Issue Fraudulent Invoices Worth 30 Billion Yuan
- Chengdu Tax Bureau Investigates Sichuan Logistics Firm for VAT Fraud and Tax Evasion
- Pingtan Tax Bureau Cracks Down on Agricultural Tax Fraud and Fake VAT Invoice Scheme
- China’s New VAT Refund Policy for Taxpayers Begins September 2025
