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A trail run
on the management of the advance ruling on the transfer pricing
("Advance Ruling") between affiliated enterprises are
prescribed below:
1. Initial
meeting:
The taxpayer can arrange an initial meeting with the tax bureau
before formally submit the Advance Ruling application. Upon receipt
of a written request, the tax bureau would arrange a meeting with
the taxpayer to discuss the details of proposed arrangement.
2. Application:
The taxpayer shall lodge the application to the respective tax bureau
within 3 months upon receipt of approval notification of proceeding
for application. Where an application involves in cross-border arrangement,
the taxpayer shall also lodge the application to the State Administration
of Taxation.
3. Assessment:
The tax bureau will assess and valuate the application within 5
months from the date that the formal application and all relevant
information have been received. The tax bureau may request the applicant
to provide further information if they consider it is necessary.
4. Negotiation:
The tax bureau can further liaise with the taxpayer on the role
of the involved parties, risks, comparable prices, presumptions,
pricing policy, calculation method and arms-length prices of the
proposed arrangement within 30 days after the preliminary assessment
is formulated. Where an application involves in cross-border arrangement,
the preliminary assessment must be approved by the State Administration
of Taxation.
5. Confirmation:
The tax bureau and the taxpayer must sign the formal agreement within
30 days of reaching the mutual agreement. The duration of the Advance
Ruling will be between two to four years.
6. This regulation
will be implemented by the International (foreign affairs) Taxation
Management Bureau or respective taxation management authorities
located in the cities or autonomous regions. Enquiries and problems
should be reported to the State Administration of Taxation, if any.
7. This regulation
is effected from the date of issue. The Advance Ruling that is confirmed
before the announcement of this notice could keep on implementing
until expiration. Any arrangement that signed or renewed after the
announcement should implement according to the notice.
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