International Related Party Transactions

Published: November 2012

In this issue of China Briefing, we turn once again to the issue of international transactions, specifically those between related parties. In the first article, we focus purely on HQ-WFOE service agreements; in the second article, we give a very brief, very basic overview of China’s transfer pricing obligations; and finally we take a quick look at the cross-border RMB settlement project

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In this issue:

  • Service Agreements for HQ and Subsidiaries
  • A Briefing Overview of China’s Transfer Pricing Obligations
  • Cross-border RMB Pilot Settlement Project
  • Q&A: How do royalty remittances work?In this issue of China Briefing, we turn once again to the issue of international transactions, specifically those between related parties.

 

In the first article, we focus purely on HQ-WFOE service agreements: how to plan for them, their tax obligations, the service fee remittance process and how a service permanent establishment (PEs) may be established by sending HQ staff to work in China for more than a brief period of time.

In the second article, we give a very brief, very basic overview of China’s transfer pricing obligations. What is the definition of related parties? What are basic transfer pricing obligations? What is the meaning of contemporaneous documentation requirements and advance pricing arrangements (APAs)?

Finally, we take a quick look at the cross-border RMB settlement project, part of the push to internationalize the RMB – a main policy goal under the 12th Five Year Plan (2011-2015) and one of the hottest topics in international payments today.

 

 


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