Laws And Regulations On Foreign Trade: Do Not Take It For Granted.

Enterprise oriented

The "labor activities that are not related to the enterprise's function risk or business operation" and "related party's activities of controlling, managing and supervising the enterprise's direct investment or indirect investment interests" are also paid.

However, it did not accept the specific labor activities carried out by the group within the group.

From these 3 costs, we can see a common requirement, that is, the expenses paid by enterprises to overseas related parties must be related to the enterprises' income or their own business activities, and the relevant principles must be followed.

It can be seen that when an enterprise pays fees to an overseas affiliated party, it is necessary to prepare the relevant contracts or agreements that the tax authorities may require to provide with the related parties, and to record the relevant information that the pactions happen in real time and comply with the principle of independent paction, so as to meet the filing requirements of the relevant departments that may be put forward by the tax authorities when conducting the audit, assessment, investigation and adjustment of the related businesses.

It is worth noting that many enterprises are often wishful thinking when preparing or providing information, that is, what information they always think they should prepare.

But this kind of self view often fails to meet the requirements of the tax authorities. There are two main problems: first, it is unable to meet the requirement of sufficiency and necessity, such as incomplete information; two, it can not play the role of proof that it must be appropriate and reasonable. It can not effectively and reasonably prove that the paction has really happened and is in line with the principle of independent paction.

In fact,

The implementation regulations have clearly stipulated the relevant information provided by enterprises, and the 114th provision of the Implementing Regulations stipulates that the relevant information as mentioned in the forty-third section of the enterprise income tax law includes:

(1) the relevant information on the price, cost setting standards, calculation methods and explanations related to related business pactions;

(two) relevant information on the re sale (pfer) price, or the final sale (pfer) price of the property, property rights and labor services involved in the business pactions.

(three) information on the product prices, pricing methods and profit levels comparable to those of other enterprises that are related to related business surveys;

(four) other relevant information related to business dealings.

Therefore, enterprises must strictly comply with the requirements for enterprises to provide relevant information in accordance with the implementing regulations and Announcement No. 16 of the enterprise income tax, and provide sufficient, reasonable and necessary relevant proof materials in a timely, complete and standardized manner.

According to the forty-first article of the enterprise income tax law, the enterprise pays the expenses to the overseas related parties, and it should comply with the principle of independent paction. The tax authorities can make adjustments to the expenses paid to the overseas affiliates without the principle of independent paction.

The seventh rule also stipulates that according to the 123rd provision of the enterprise income tax law, the payment of fees to the overseas related party does not conform to the principle of independent paction. The tax authorities may implement special tax adjustment within 10 years from the tax year that the business occurs.

Therefore, when the enterprises pay the expenses to the foreign parties in the future, they should strictly abide by the principle of independent paction and prevent the tax risk of the enterprises due to the special tax adjustment that the tax authorities may carry out.