Double Tax Agreement With China
China`s double taxation treaties (DSAs) can be used to benefit from a lower tax rate for overseas payments. However, DTA benefits do not automatically apply to everyone. Non-resident taxable persons may either benefit from the benefits themselves or conclude the application procedure with a detained agent. The work is based on two pillars. The first pillar aims to change the fundamental elements of the international tax by introducing non-physical thresholds for taxable remote presence (in addition to traditional PEs for physical presence) and profit allocation form rules that would operate at the level of multinationals in conjunction with traditional transactional clearing rules based on non-competition principles. Data from the Department of Commerce of the People`s Republic of China (MOFCOM) through the end of 2018 shows that 54% of FDI stocks in mainland China, or $1.1 trillion, come from the Hong Kong Special Administrative Area.
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