Chinese tax authorities’ latest focus – Equity transfer and valuation for taxation purposes

Tax Controversy & Dispute Resolution ()

"In July 2012, PwC China was invited by China State Administration of Taxation (the “SAT”) to lead one of the sessions in their annual tax official training on anti-tax avoidance issues. The key topic for this training was “Equity Transfer and Valuation for Taxation Purposes”.

At the same time, the SAT has prepared an internal training material handbook entitled “Enterprise Valuation - Theories & Methodologies” (the “Handbook”). The introduction of the Handbook states that “as the Chinese tax authorities are encountering more and more intangible assets and equity transfer transactions in anti-tax avoidance investigation cases and competent authority negotiations, the SAT has decided to improve the valuation techniques of tax officials by providing these training materials”."