| Circular of the State Administration of Taxation of the People's Republic of China, on Explanations of Relevant Articles in the Second Protocol of Taxation Agreement between South Korea and China |
| Friday,July 06,2007 Posted: 10:35 BJT(0235 GMT) CAITEC |
Nation taxation bureaus and local taxation bureaus of all provinces, autonomous regions, municipalities and cities specially designated in the state plan: The second protocol of taxation agreement between South Korea and China (hereinafter referred to as “South Korea and China Agreement”) has taken effect as from Jul 4, 2006. The regulations of the first article are interpreted as follows with consideration to better understanding and implementation: The protocol aims to prevent tax payers from inappropriately enjoying treatment of taxation agreement, which specifically means that companies, trust or other entities of citizens of one party of the contracting states (hereinafter referred to as “companies”), incase directly or indirectly owned or controlled by non-citizen (no matter one person, or more than one person, no matter individual or group), and the material tax deduct compared with the status that the companies directly owned or controlled by citizens of the state, when the said companies gain from the other party of the contracting states, the South Korea and China agreement is not applicable. The stipulations of the article of the South Korea and China agreement is a try in accordance with experience of preventing abuse of taxation protocol by the taxation authorities of the 2 sides. For purposes of bring the regulation into full play, if encounter companies of any citizen of South Korea apply to enjoy treatment of South Korea and China agreement (especially preferential clause of bonus stock, interest and franchise fee), please pay attention to other information in addition to examination of ID card. Mar 16, 2007 (All information published in this website is authentic in Chinese. English is provided for reference only. ) |
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