Where there is an indirect transfer of Chinese taxable assets by non-resident enterprises, either party to the transaction or the PRC enterprise whose shares are to be indirectly transferred may report the transfer to the in-charge tax authority.
Article 9 and Article 10 of the State Taxation Administration (STA) Public Notice on Several Issues Concerning the Enterprise Income Tax on Indirect Asset Transfer by Non-Resident Enterprises (STA Public Notice  No. 7)
1. Taxpayers are responsible for the authenticity and legality of the materials submitted.
2. Taxpayers are required to submit paper documents when they go to the tax service hall to handle their tax affairs,or submit electronic documents according to the operation requirements of the online system if they handle their tax affairs online or through mobile terminals.
3. For materials not specified as original or printed copies in the “Materials Needed” list, the original copies shall be provided; for materials specified as printed copies, only printed copies shall be provided; for materials specified as original and printed copies, the printed copies will be collected and the original copies will be returned after verification.
4. Taxpayers may use e-signatures that meet the requirements of the Electronic Signature Law of the People’s Republic of China, which has the same legal effect as handwritten signatures or seals.
5. The submitted printed copies must state its consistency with the original copies and be stamped with the company’s official sealor signed by the taxpayer.
1. Tax Service Halls (Click to view the location, opening hours and contact information of the tax service halls)
“City-wide Universal Processing” services willnot be provided at all tax service halls including the Second Tax Bureau of Shenzhen Municipality.
2. No self-service tax terminalis available.
3. Online service
No E-tax bureau, Mobile terminal or WeChat (tax bureau) access is available.
The competent tax authorities
1. Time limit for taxpayers
2. Time limit for tax authorities
The tax authority shallcomplete the procedure immediately after acceptance.
Please refer to the tax service map for contact numbers of each tax service hall.
Tax authorities will give feedback on the processing result.
Notices for Taxpayers
1. The tax authorities provide single-window service. Taxpayers need to visit the tax authorities only once at most on the precondition that the materials are complete and meet the legal requirements for acceptance.
2. The following criteria shall be used to determine the tax authority in charge of the underlying matter:
(1) If the taxable assets being transferred are attributable to an establishment or place in China, the tax authority in charge of such establishment or place shall be the tax authority in charge.
(2) Apart from the circumstance described in Item (1), if the assets being transferred are real property in China, the tax authority in charge of the deducting and withholding obligator or at the place of the real property shall be the tax authority in charge.
(3) Apart from the circumstance described in Item (1) and (2), if the assets being transferred are equity interest investments by Chinese resident enterprises, the tax authority in charge of thewithholding agent or the enterprise being transferred shall be the tax authority in charge.
3. If the equity transferor leads to the indirect transfer of more than two Chinese taxable assets through the direct transfer of equity in the same foreign enterprise, involving more than two competent tax authorities, both parties to the transaction of the indirect transfer of Chinese taxable assets or the PRC enterprise whose shares are to be indirectly transferred may choose which in-charge tax authority to submit relevant reporting materials to, and such competent tax authority shall be responsible for the relevant examination work as prescribed.
4. If the indirect transfer is re-characterized by the tax authorities and confirmed as a direct transfer of equity or other assets of a PRC resident enterprise, the withholding agent and non-resident taxpayer shall withhold or declare the enterprise income tax in accordance with the relevant provisions.
5. If an equity transferor causes indirect transfer of more than two Chinese taxable assets through direct transfer of equity in the same foreign enterprise, which is taxable in accordance with the relevant regulations and involves more than two competent tax authorities, the equity transferor shall declare and pay enterprise income tax at each of the respective competent tax authorities involved.
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