Transfer Pricing: What's New in China?

Shanghai, Guangzhou, and Shenzhen, China
01 March 2011
Hosted By: NERA Economic Consulting in cooperation with the French Chamber of Commerce

NERA's Global Transfer Pricing Practice hosted a workshop in Shanghai on 1 March 2011 to address the structuring and valuation of intra-group transactions between Europe and China. Principal Sébastien Gonnet and Special Consultant Dr. Alexander Voegele provided an update on the transfer pricing environment in China, including the most recent information about tax and transfer pricing audits, transfer pricing documentation, the review process of the tax authorities, and current Advance Pricing Agreement (APA) cases.

In addition, Mr. Gonnet and Dr. Voegele coordinated with the French Chamber of Commerce to present the same workshop in Guangzhou on 2 March and in Shenzhen on 3 March.

With the help of case studies, these workshops aimed to illustrate the key challenges faced by CFOs and tax managers of Chinese subsidiaries of European multinational enterprises (MNEs) in China in relation to transfer pricing. Topics of discussion included:

  • Managing a cost-plus system for a plant
  • Structuring and evaluation of technology and trademark license agreements
  • Justifying the arm's length nature of head office services and corporate charges
  • Structuring of buying/sourcing operations (in Mainland China and Hong-Kong)
  • Structuring and justifying charges for the relocation of functions
  • In case of complex structuring or transactions, the pros and cons of entering into an APA process with Chinese Central and Local tax bureaus

To learn more, please contact Yvonne Yan at yvonne.yan@nera.com.

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