China's Advance Pricing Arrangements

The State Taxation Administration ("STA") has issued the Announcement on Matters Regarding the Application of the Summary Procedure to Unilateral Advance Pricing Arrangements (the "Announcement") for implementation from September 1, 2021.

The Announcement specifies that, where enterprises applying for unilateral APAs in accordance with the relevant provisions of the Announcement of the State Taxation Administration on Matters Regarding Refining the Administration of Advance Pricing Arrangements meet the requirements hereof, the summary procedure may apply.

The summary procedure shall include three stages, namely, application and assessment, negotiation and signing, and monitoring and implementation. The Announcement makes clear that, enterprises meeting any of the three conditions, such as "having provided the tax authority with the contemporaneous documentation as prescribed in the Announcement of the State Taxation Administration on Matters relating to Improvement of the Filing of Related-Party Transactions and the Management of Contemporaneous Documentation for the three tax years prior to the year when the application is submitted", may request for the application of the summary procedure.

However, where enterprises have any of the five circumstances, such as "failing to prepare, preserve or provide the contemporaneous documentation as required", their request will not be accepted by the tax authority.