State Administration of Taxation, Issues Relevant to Tax Treatment of Representative Offices of Foreign Enterprises Official Reply

Promulgated: May 17 2004

Main contents: Resident representative offices engaged in "trading for own account and trading as an agent" as mentioned in Article 2(2) of the State Administration of Taxation, Tax Administration Issues Relevant to Resident Representative Offices of Foreign Enterprises Circular for levy of tax refers to representative offices that concurrently engage in trading for own account and trading as an agent. Tax exemption shall still be granted to representative offices of foreign enterprises that solely engage in mere understanding of the market situation, provision of business information and other preparatory and ancillary businesses for their parent companies' commodity trading for own account if their parent companies are able to provide proof that their commodity trading with China has always been conducted by means of trading for own account.
Related legislation: Tax Administration Issues Relevant to Resident Representative Offices of Foreign Enterprises Circular, Mar 3 2003, CLP 2003 No.6 p48; and State Administration of Taxation, Several Specific Problems Concerning the Collection of Tax from Resident Representative Offices of Foreign Enterprises Circular, Jan 2 1997, CLP 1997 No.4 p11