1、978-7-5678-1140-9_中國預約定價安排年度報告（2020）.indd 12021/10/8 下午2:33?(2020)State Taxation Administration Peoples Republic of ChinaChina Advance Pricing Arrangement Annual Report?2?3Only in hard times can courage and perseverance be manifested and only after polishing can a piece of jade be fi ner. 2020 was n

2、ot an easy year for the mankind as almost the whole world, amidst rising unilateralism, was besieged by the Covid-19 pandemic. Even confronted with the unprecedented challenges, China was able to deliver on the 13th Five-Year Plan, marking a historic milestone in the journey of building a moderately

3、 prosperous society in all respects and achieving a decisive success in eradicating extreme poverty. Standing at the historic crossroads, the State Taxation Administration (STA), under the guidance of the Central Committ ee of the Communist Party of China (CPC), has been actively engaged in the inte

4、rnational taxation cooperation, while continuing on the deepening of the structural reform on tax collection and administration, in order to prepare for the celebration of the centenary of the founding of the CPC in 2021.Th is year, cross-border business and trades had to be suspended and the world

5、economy was dealt with a blow by the COVID-19 outbreak. But there were still a few countries that liked to politicize everything, trying to put the breaks on globalization. Th e outbreak of the pandemic and the resurgence of unilateralism has made the need for cross-border tax certainty even more ur

6、gent for the taxpayers. Rising to the occasion, the STA had made it one of its priorities to building an international tax system that facilitated cooperation and delivered mutually benefi cial outcomes. Th e STA has deepened the “Belt and Road Initiative” (BRI) cooperation on tax collection and adm

7、inistration. In June, the online conference, “Responding to Covid-19: BRITACOM? Perspective”, was successfully held, and the participants discussed and exchanged opinions about combating the virus and pushing forward with the development of BRITCOM. At the end of this year, another high-level video

8、conference was organized under the theme of “New Challenges, New Opportunities, New FutureDevelopment Planning of Tax ?Belt and Road Initiative Tax Administration Cooperation Mechanism.Preface?4?5Digitalization”, with 15 major outcomes delivered. Also, the first edition of Belt and Road Initiative T

9、ax journal was released, adding onto the knowledge sharing initiatives taken on by the BRITACOM. Th e STA continued to play a key role in the international rule making process. By actively participating in the multilateral negotiation in addressing the tax challenges arising from the digitalization

10、of the economy, the STA has shown its ability in infl uencing the international tax rule making. Also, the STA has made itself available to address issues arising from the special circumstances caused by the outbreak of the pandemic that are related to treaty implementation and non-resident taxation

11、, while closely following the changes and revisions that have been made to the international standards.The STA was dedicated to improving the tax environment for businesses as part of Chinas opening-up policy. The STA had conducted 28 virtual bilateral consultations to eliminate more than 2 billion

12、double taxation for taxpayers. 104 Country (Region) Taxation Guidelines for Cross-Border Investment were released or updated to help taxpayers bett er understand taxation policies of the investment destinations. Apart from that, the policy that provided for temporary exemption on withholding tax for

13、 foreign investors that directly invested the distributed profi ts in the businesses was consistently implemented, saving 10.6 billion for taxpayers in the form of deferred taxes. As one of the measures taken by the STA to improve the business environment and boost international taxation cooperation

14、, Chinas APA program, which was put in place to prevent double taxation and support cross-border investments and trades, has been running on a steady pace. Th is report continues to off er information on relevant tax policies, implementation procedures and development of Chinas APA program. Statisti

15、cs on the program is also provided for analytical purposes. Th e STA expects the report to help cross-border taxpayers as well as the general public bett er understand Chinas taxation environment and APA program. WANG Daoshu Th e Deputy Commissioner State Taxation Administration ?2? ? ? ? ? ? ? ? ?

16、? ? ? ? ? ? ? ? ? ? ? ? ? ?3ContentsNotes 3I Introduction to Chinas APA Program 71. Defi nition 72. Categorization 73. Advantages 7II Legislation and Practice Development of Chinas APA 111. History 112. Existing Legal and Regulatory Basis (by August 2021) 15III APA Procedures 171. Prerequisites to a

17、n APA Application 172. APA Process and Implementation 17A. Pre-fi ling Meeting 21B. Lett er of Intent 23C. Analysis and Evaluation 25D. Formal Application 27E. Negotiation and Signing 29F. Implementation and Monitoring 31?4? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?

18、 ? ? ? ? ? ? ?53. Rollback 334. Renewal 355. Termination or Cancellation 356. Particular Situations Referred to Multiple Tax Authorities 37IV Th e Simplifi ed Procedure for UAPA 391. Prerequisites and Tax Years to be Covered by UAPA Simplifi ed Procedure 39(1) Prerequisites 39(2) Tax Years to be Cov

19、ered by UAPA Simplifi ed Procedure 392. Th e Process of UAPA Simplifi ed Procedure 39A. Application and Evaluation 41B. Negotiation and Signing 43C. Implementation and Monitoring 453. Other Issues 45V Protection of Taxpayers Rights 471. Confi dentiality of Taxpayers Information 472. Taxpayers Freedo

20、m of Contract 47VI APA Statistics 491. APAs Signed by Year 492. APAs by Phase 533. APAs by Transaction Type 534. Bilateral APAs by Region 555. APAs by Time Taken 576. APAs by Transfer Pricing Method 597. Industries Covered by Signed APAs 63VII STA Contacts (by Province) for APA Requests 65?6? ? ? ?

21、? ? ? ? ? ? ? ? ? ? ? ? ? ?7Appendices: Forms and Schedules of the APA Program 711. APA Pre-fi ling Meeting Application Lett er 712. APA Lett er of Intent 733. APA Formal Application Lett er 754. Advance Pricing Arrangement (Unilateral) (Text for Reference) 775. Notice on APA Tax Payable (Refundable

22、) 836. APA Renewal Application 857. Application to Initiate Transfer Pricing Mutual Agreement Procedures 878. Application Lett er for the Simplifi ed Procedure for UAPA 912?3?This is the 12nd APA annual report released by the State Taxation Administration (STA) to describe the latest mechanisms, pro

23、cedures, and implementation of the APA program in China.Th is report is intended to provide guidance to enterprises interested in entering into APAs with the Chinese tax authority, and to serve as a reference for competent authorities of other countries (regions) and the general public to bett er un

24、derstand Chinas APA program. It does not have legal validity, and therefore should not be regarded as a legal basis for enterprises or the Chinese tax authority to negotiate or conclude an APA.Th is report contains data pertaining to period between January 1, 2005 and December 31, 2020.By December 3

25、1, 2020, the cumulative total of APAs signed is 206, 116 unilateral and 90 bilateral.In 2020, a total of 15 unilateral APAs and 14 bilateral APAs were signed. Of the 14 bilateral APAs, 9 were signed with Asian countries (regions), 2 were signed with North American countries, 2 were signed with Europ

26、ean countries and the remaining 1 was signed with an Oceanian country. Most of the APAs signed in 2020 still involve manufacturing industry, which demonstrates the role of taxation on serving the real economy.Notes4?5?As the implementation programme of BEPS action plans, the Public Notice of the Sta

27、te Taxation Administration on Issuing the Administrative Measures for Special Tax Adjustment and Investigation and Mutual Agreement Procedures (Public Notice of the State Taxation Administration2017No. 6, hereinaft er referred to as Public Notice No. 6) and Public Notice on Matters Regarding Enhanci

28、ng the Administration of Advance Pricing Arrangements (Public Notice of the State Taxation Administration2016No. 64, hereinaft er referred to as the Public Notice No. 64) jointly provide regulatory basis and process guidance for APA matters. In order to optimize business environment and make the pro

29、cess of unilateral APA more efficiently, the STA releases Public Notice of the State Taxation Administration on Matters Regarding the Application of the Simplifi ed Procedure for Unilateral Advance Pricing Arrangements (Public Notice of the State Taxation Administration2021No. 24, hereinaft er refer

30、red to as Public Notice No. 24). Th e Public Notice No. 24 is included in this report to provide timely and eff ective guidance for taxpayers so as to help them understand the lastest system and procedure of APA.Required by the BEPS Action 5 minimum standard, the unilateral APAs signed after April 1

31、, 2016 are subject to the compulsory spontaneous exchange framework. It is expected that the APA request will arise against the backdrop of concern about uncertainty drawn out by the universal implementation of BEPS projects and the increased transfer pricing scrutiny by tax administrations. Th e ST

32、A has therefore determined to prioritize certain APA requests, taking into account the following factors:a) Overall principle: first come, first served. b) The quality of the request submission, e.g. whether all required documents have been submitted, whether sufficient documentation clearly evidenc

33、ing the transactions throughout the entire value chain or supply chain has been provided, whether the applied transfer pricing method is appropriate, and whether the calculation is correct. Applicant will be required to make additions or revisions to the submission when necessary. c) Whether the app

34、licant is in a specifi c industry or located in a specific region that merits prioritized attention. d) For a BAPA request,whether the BAPA partner country (region) has the intention to accept the case and pursue the BAPA will also be an important factor for consideration. Among the four factors, th

35、e one the STA values most is the quality of the submission. A submission that presents innovative application of transfer pricing methods or high quality quantitative analysis for intangibles, cost savings or market premiums will merit the STAs prioritized att ention.6?（二）分類?7?I Introduction to Chin

36、as APA Program1. Defi nitionAn APA refers to an arrangement whereby an enterprise applies in advance to negotiate and reach agreement with the tax authorities in respect of the transfer pricing methods and corresponding calculation methods to be applied to its related party transactions for future y

37、ears in accordance with the arms length principle. An APA applies to related party transactions over a period of 3 to 5 consecutive years starting from the year during which Notice on Tax Matters is issued by the in-charge tax administration(s) notifying the acceptance of enterprises intent for the

38、APA.2. CategorizationAn APA may be categorized as unilateral, bilateral or multilateral based on the number of competent authorities involved in the APA.In a unilateral APA, the enterprise enters into the APA with one countrys tax authority. A unilateral APA can only provide certainty to the enterpr

39、ises pricing methodologies and calculation process with respect to its related party transactions within one country (region), but cannot ensure the eff ective avoidance of transfer pricing audits or adjustments from the tax authority of the overseas related party(ies) it transact with. Th us,a unil

40、ateral APA cannot prevent international double taxation.In a bilateral or multilateral APA, the enterprise negotiates and enters into the APA with two or more countries competent authorities. These authorities will need to reach an agreement with regard to the pricing methodologies and calculation p

41、rocess used in the cross-border related party transactions of the enterprise in question. Bilateral and multilateral APAs can be used to eff ectively avoid international double taxation and provide certainty regarding the transfer pricing policies of the enterprise.3. AdvantagesAn APA is an eff ecti

42、ve approach to deal with transfer pricing issues and potential transfer pricing disputes through the collaboration between tax authorities and an enterprise. An APA between the tax authority (ies)and the enterprise(s) is binding on all parties. Th e enterprise shall proactively conform to all the pr

43、ovisions 8?9?and requirements of the arrangement, while tax authority(ies) shall monitor the implementation of the agreement.An APA is a voluntary agreement conducted on the basis of equality and mutual trust. It serves as an effective mechanism to enhance understanding, strengthen collaboration, an

44、d mitigate disputes between enterprises and tax authorities. APAs have the following benefi ts:(1) Provide certainty for tax authorities and enterprises in regards to transfer pricing issues for future years, and hence will off er certainty with regard to taxpayers operations and relevant tax obliga

45、tions and provide tax authorities with an expectation of steady tax revenue infl ows;(2) Reduce tax authorities costs related to transfer pricing administration and audit as well as enterprisestax compliance costs by mitigating the risk of a transfer pricing audit;(3) Improve the quality of tax comp

46、liance services provided by the tax authorities, facilitate the balanced development of administration and service, and assure taxpayers of the relevant rights and benefi ts.Bilateral and multilateral APAs can also provide the following advantages:(1) Facilitate communication and collaboration among

47、 the competent tax authorities of different jurisdictions;(2) Help enterprises avoid transfer pricing adjustments as well as double taxation risks in two (for bilateral APA) or more (for multilateral APA) tax jurisdictions.10?11?II Legislation and Practice Development of Chinas APA 1. HistoryChina b

48、egan using APAs on a trial basis in the late 1990s. In 1998, an APA was included as one of other reasonable methods of transfer pricing adjustments in Article 28 of The Regulation on the Taxation of Transactions between Related Parties (Trial)?(Guo Shui Fa 1998 No. 59). In 1998, the first unilateral

49、 APA was reached between the tax authority and an enterprise.In 2002, the APA program was formally introduced in Article 53 of Rules for the Implementation of the Law of the Peoples Republic of China on the Administration of Tax Collection? (Decree No. 362 of the State Council), and APAs were elevat

50、ed from an adjustment method to a program.In 2004, the STA promulgated Implementation Rules on Advance Pricing Arrangements for Transactions between Related Parties (Trial Version) (Guo Shui Fa 2004 No. 118), which provides details of the APA program and specific procedures such as negotiation and c