Foreign investors get tax dividend boost
July 20, 2012 | BY
clpstaff &clp articlesA new Circular has lowered withholding tax in China, but foreign companies still need to comply with strict regulations from the State Administration of Foreign Exchange
The State Administration for Taxation (SAT) released Circular 30 (关于认定税收协定中“受益所有人”的公告) on June 29 and it came into effect on July 1.
The Circular reduces the burden for determining beneficial owners. It states that, when it comes to passive income under international tax laws, the dividend should be the main form of passive income compared with other royalties and interest.
Taxing dividends is sometimes a complex issue because it can be difficult to determine the beneficial owners. However, Circular 30 employs a safe harbour principle for owners, lowering the burden for foreign investors and the SAT.
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