China restates tax rules on offshore indirect transfers of PRC assets
The State Administration of Taxation has announced a set of principles which make important clarifications and supplements to Circular 698 – the main rule on the tax treatment of indirect transfers of PRC equity interests by non PRC residents.
We analyse the impact of the new announcement in the following areas:
- the scope of Circular 698
- the definition of the commercial purpose of a transaction
- safe harbour rules for intra-group transactions
- the obligations of parties to a transaction
- additional information required by tax authorities