Tax Pacts to Make Going Global Easier
Release time:2015-12-08 15:04 Source:

Companies can face hefty expenses, and many aren't fully familiar with their rights, says official

The State Administration of Taxation will sign and update more tax treaties and step up the implementation of these agreements to help Chinese companies investing in countries that form part of the "Belt and Road Initiative", an official from the agency told China Daily.

The SAT will also step up Mutual Agreement Procedures, a bilateral consulting mechanism, to help Chinese companies involved in international tax disputes, said Liao Tizhong, director-general of the international taxation department at the SAT.

Tax treaties reduce or avoid double taxation, which involves individuals or companies from one country paying tax in another country for the same income. Since 1983, China has signed 100 such pacts, the latest with Chile in May.

Chinese companies benefit from these treaties by enjoying generally lower withholding tax rates on interest, dividends and royalties, among other benefits stipulated. The treaties not only prevent double taxation, they also offer certainty to taxpayers.