Restructuring rules restructured

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    clpstaff &clp articles

    New tax implementation rules for corporate restructuring clarify access to special tax treatments. Recently restructured companies should check their tax position carefully

    The long-anticipated tax implementation rules for corporate restructuring were recently issued by China's finance and tax authorities.

    The Rules, officially titled the Circular on Several Issues Concerning the Enterprise Income Tax Treatment of Enterprise Re-organisations (??????????????????????), were promulgated by the Ministry of Finance (MoF) and the State Administration of Taxation (SAT) on April 30 2009. They apply retroactively to restructurings that occurred on or after January 1 2008 and mark a milestone in the development of the China tax landscape. Aside from bridging the tax treatments of corporate restructuring to the new PRC Enterprise Income Tax Law (?????????????) and its Implementation Regulations (?????????????????), the Rules also closely align the tax concepts to international practices. This creates consistency and flexibility for both domestic and foreign enterprises.

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