Abstract:
This paper addresses the tax treatment in China of a cost contribution
arrangement (CCA) in the light of the treatments in a selection of other countries, with
the objective of ascertaining whether the law and practice in China conforms to
international best practice. The paper arises out of concerns aired by a group of
representatives, each from a multinational enterprise (MNE), which operates in China,
about the prevailing Chinese law and State Administration of Taxation (SAT) practice
with respect to CCAs. These concerns were raised at the International Research
Seminar: Joint Research Project on Taxation held in Beijing by the Chinese
International Taxation Research Institute and the International Bureau of Fiscal
Documentation on 2930
June 2005. The paper is intended primarily to provide an
overview of various country practices in relation to CCAs as a basis for further
discussion about the state of the relevant law and practice in China.
