Official Reply on Issues of Determining What Constitutes a Permanent Establishment of a Foreign Enterprise Providing Services in China and of the Attribution of the Profits Derived Thereby

关于外国企业在中国境内提供劳务活动常设机构判定及利润归属问题的批复

The Official Reply addresses queries from Provisional Office of the State Administration of Taxation on the definition of permanent establishments of foreign enterprise providing services in the PRC.

(Issued by the State Administration of Taxation on July 19 2006.):

(国家税务总局于二零零六年七月十九日发布。)

Guo Shui Han [2006] No.694

国税函 [2006] 694号

Jiangsu Provincial Office of the State Administration of Taxation:

江苏省国家税务局：

Your Request for Instructions on the Issue of the Attribution of the Profits of Permanent Establishments of Foreign Enterprises Providing Services in China (Su Guo Shui Fa [2006] No.104) has been received. We hereby clarify the issues raised in your document concerning the determination of permanent establishments and the attribution of the profits derived thereby as follows:

你局《关于外国企业提供劳务构成常设机构利润归属问题的请示》(苏国税发〔2006〕104号)收悉。现就文中所提有关常设机构判定及利润归属问题明确如下：

1. In actual practice, the

一、税收协定常设机构条款“缔约国一方企业通过雇员或其他人员，在缔约国另一方为同一项目或相关联的项目提供劳务，包括咨询劳务，仅以在任何十二个月中连续或累计超过六个月的为限”的规定，具体执行中是指，外国企业在中国境内未设立机构场所，仅派其雇员到中国境内为有关项目提供劳务，包括咨询劳务，当这些雇员在中国境内实际工作时间在任何十二个月中连续或累计超过六个月时，则可判定该外国企业在中国境内构成常设机构。